Despite the recent strengthening of the dollar and traders adjusting their expectations for a 25 bps move by the Fed, gold prices remain unfazed. While there was a slight dip earlier in the week, gold has rebounded in the past two days and is currently up another 0.3% today, trading at $2,638 with a 28% year-to-date gain.
Throughout the year, gold experienced consolidation from mid-April to June before embarking on another upward trajectory, reaching fresh record highs multiple times in 2024.
The resilience of gold in the face of global economic changes has been surprising. Despite expectations for lower rates being pushed back, gold has continued to track higher consistently. Central bank buying plays a significant role, but the lack of significant dips in gold charts is noteworthy.
The rapid and substantial rise in gold prices stands out, especially considering that ETF positioning does not align with this trend.
Gold ($/oz) vs SPDR Gold ETF holdings
Despite recent narratives, the author maintains a positive view on gold but acknowledges the challenging nature of advocating for an asset showing such one-sided movement. A healthy pullback in gold before the seasonal buying months of December and January is desired, although one has yet to materialize.
The author mentions China reportedly pausing gold purchases as a potential reason for profit-taking, but uncertainties surround the reliability of such reports. Despite fluctuations in Fed pricing and a stronger dollar, gold’s resilience as a safe haven asset remains steadfast amid geopolitical events in the Middle East.
While a technical correction in gold is overdue, the lack of a trigger point for such a move raises questions about the sustainability of gold’s current price levels.
As the year approaches its end and the seasonal rush in December and January looms, the discussion shifts to whether gold is due for a pullback or correction. The author invites readers to share their thoughts on potential triggers for a shift in gold prices.
Insight:
-The article discusses the surprising resilience of gold in the face of various economic developments and the lack of significant pullbacks despite expectations for lower rates.
-The author highlights the importance of considering technical indicators for a potential gold price correction, emphasizing the need for a trigger point to initiate such a move.
-The anticipation of seasonal buying in December and January adds another layer of complexity to the discussion around gold’s current price levels.
