Things are a little trickier this time around, as gold prices have already risen more than 27% in 2024. So far, the situation has calmed down in November and December, but this is probably largely due to the US election results, which in turn are influencing the US election results. The Fed provided some guidance for next year. At least for now, the strong dollar is helping to keep things under control.
As gold prices look to end December's strong record (of course, there's still time to recover), is January, typically gold's best-performing month, also under threat? ?
Recent seasonal patterns also suggest that January has been the best month for gold over the past decade. However, this is not necessarily the case in the post-pandemic era. Some may argue that December buying is leading the way. But perhaps it has something to do with the fact that China was also struggling during this period? After all, there is always the idea that a gold rush will arrive before the Lunar New Year celebrations.
That said, China itself has been a big fan of gold over the past 12 months. That remains true, no matter what the central purchasing data suggests.
Looking ahead to next month, there are a few things that could set gold back as we head into the new year. The biggest factor, of course, is that market participants are still fresh in their minds about last week's hawkish move by the Federal Reserve. This has given the dollar some ground, and the broader market could recover from its momentum in the new year.
The other thing is that gold has suffered a little bit from a technical standpoint over the past week. Prices fell below the 100-day moving average for the first time in more than a year, but gold buyers have rebounded it in recent trading. The key level is currently seen at $2,616, with prices trading around $2,635 above it today. Having said that, it's hard to see things in such a tenuous liquidity situation, but this will definitely be a spot to watch when things return to normal next week.
If buyers can maintain technical control, it will provide a positive boost for gold to maintain its January trend.
