Precious metals started a prolonged bear move in 2012 following the prospects of higher rates and a stronger dollar, and this move proceeded in a well-defined downward channel for a couple of years. Early 2016 saw the first signs of a reversal in rate expectations & the dollar, and gold broke out of the descending channel to the upside. Gold tried to break above $1380-$1400 three times between 2016 and 2017, and once again in early 2018. That was huge resistance but it finally broke in June 2019; this was a big technical event and Gold should continue to trade well as long as we are above that level.
PMs are generally inversely correlated with the US Dollar, and whenever the Fed is in a tightening cycle it causes a danger for PM prices. The global macro picture still contains several themes which should further strengthen gold in the medium term: historically low inflation; sluggish growth; loose monetary policy compared to long-term average, debt issuance & currency debasement; global geopolitical risks. Furthermore, the Fed remains very dovish and this will continue to boost real asset prices.
On the other hand though, the US Dollar sees periods of strength and these deliver heavy short-term blows to Gold. PMs have seen strong selling pressure (particularly at important technical levels), absorbing very large sell orders usually during illiquid times, and with no apparent interest in best price execution. These waves always have to be navigated, as do often very bullish positioning & sentiment. Furthermore, we have seen that in times of crisis precious metals get sold in order to fund margin calls. Gold broke through to new all-time highs in July 2020 and looks very strong in light of the global monetary easing CB policies. There can obviously be corrections, especially during risk-off and Dollar spikes – but in the end, the medium term direction for precious metals should be considerably higher.