Gold is starting to come back on the radar amid the seasonal tailwind in December and January
However, amid the outlook for a Fed rate hike and the relative uncertainty over the omicron variant, that won’t make things easy to navigate in the coming weeks.
Typically, the seasonal tailwind for gold occurs around the middle of the month through January – the case being demand before the Lunar New Year holiday.
You would have to go back to December 2013 and January 2014 to find a period where gold did not register a gain when you put the two months together.
As much as this may be one of the most favored trades to start the New Year lately, I’m afraid this time around may be a bit different given the factors at play as noted above.
The Fed could step up the pace of the cut in January, which could scare off the gold bugs and the techniques themselves don’t look very encouraging.
Recent price action sees gold continue to hover around $ 1,800, but buyers are unable to maintain a push above the confluence of the major daily moving averages at $ 1,791.
This remains a key level for buyers to break through in an attempt to push back above $ 1,800 and challenge key trendline resistance from the August 2020 and November 2021 highs.
Gold is currently hovering around short-term trendline support, but I’m concerned we may see a slight dip closer to November lows – and even perhaps September lows – before buyers do not find a foothold and seek to capitalize on the seasons.
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