Commentary for Friday, Dec 27, 2024 (www.golddealer.com) – Today gold closed down $21.60 at $2617.20, and silver closed down $0.39 at $29.66. The price of gold drifted lower this week in lackluster holiday trading. And while the Dollar Index dipped somewhat it is still holding up at the higher end of its current range (108.00). The drop in gold prices today may just confirm that gold is testing support after recent weakness. This is also a short trading week, and many traders left early. It is a bullish plus that gold is holding above $2600.00, waiting for still expected Trump moves which might create an unstable market in the short term. In the meantime, I’m optimistic about higher prices and possible fresh record highs in 2025. Last Friday gold closed at $2628.70 / silver at $29.66. On the week gold closed down $11.50, and silver was unchanged.
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On Monday gold drifted lower, reaching daily lows of $2610.00 in thin and lackluster holiday trading, which figures as the Dollar Index holds weekly highs (108.00). A reminder that we will be closed Christmas Dec 25th and the following day Dec 26th. We will be back at work Dec 27th (Friday). Both gold and silver remain defensive because the FOMC is still considering its options. Still, I don’t believe you will see much action because of the holiday season.
My guess is that the metals will continue to drift, but not fall out of bed. It is a plus that gold is holding above $2600.00 but depending on the latest FOMC revelation could move higher or lower as the technical picture now suggests a push between the bulls and bears. Silver has been testing recent lows and the bears have the technical edge but there does not seem to be much conviction in this trade either. So, through the New Year I would not rearrange the deck chairs, expect a flat market as most traders have already packed up and are traveling for the holiday season. Next year, however, I’m more optimistic because Chief Powell claims we have dodged a recession. The Fed may lower interest rates, perhaps less aggressively but lower nonetheless and this will refresh bullish sentiment. Still, be patient with this market. Today’s gold price ($2600.00) may not seem cheap, but it is hard to believe traders are not considering $3000.00 gold in 2025 if interest rates drift lower as expected.
FXEmpire – Gold Sluggish on Monday – “The gold market continues to see a lot of nothingness at the moment, as the market is more likely than not going to be focusing on the holiday more than anything else. All things being equal, it looks as if we are trying to form some kind of bottom at the moment, but also, we have to keep in mind that we are still in an uptrend, albeit a sluggish one at the moment. Technical Analysis – The gold market had initially tried to rally a little bit during the trading session on Monday, but you can see we have drifted a little bit lower, and we are sitting just below the 50 day EMA. It’s also worth noting that there is an uptrend line just below, so we’ll have to see whether or not we are going to break down below there. If we do, then obviously that would be a big deal, perhaps sending gold down to the $2,500 level. As things stand right now though, I think the market is probably more likely than not to consolidate a bit, mainly due to the holidays and of course the fact that liquidity is an issue. If we break above the 50 day EMA, then it’s possible that we could see this market go looking to the $2,700 level. Keep an eye on interest rates in America because if they continue to rise in the bond markets, that does work against gold, but the negative correlation between the US dollar and the gold market seems to have been broken this year, which does happen from time to time. So, it’s not a huge surprise. But in general, I think you’ve got a situation where gold continues to be very noisy. Watch the 50 day EMA. It gives you a little bit of a heads up as does the uptrend line that sits just below. Silver Continues to See Sluggish Resistance – The silver market continues to see a lot of noise at the moment, but at this point, we are watching the trendline for some kind of decision to be made for the longer-term. Silver is something that you should always be careful for, but this time of year makes it even worse when it comes to position sizing. Technical Analysis – The silver market rallied initially during the trading session on Monday as the $30 level was targeted to the upside. We also have a previous uptrend line that should now offer resistance and so far, it has. The market is also dancing around the 200 day EMA, so it ties together for a very noisy place on the chart. Furthermore, we also have the holidays over the next week or two, so that affects liquidity and therefore I’m not really sure that you can read too much into the charts when it comes to silver. In other words, this is a situation where we are killing time and waiting for momentum to show up. However, if we were to break above the $30.50 level, I think that would be a very valuable piece of insight that we are in fact recovering. If we break down below the lows of the last couple of trading sessions, then I think the market probably breaks down. In general, I think this is a market that’s on the precipice of a bigger move, but that move might actually be early next year, keep that in mind.”
On the day gold closed down $16.40 at $2612.30, and silver closed up $0.23 at $29.89.
On Tuesday the price of gold drifted lower on the open reaching $2610.00, where traders bought the dip pushing prices back to daily highs of $2620.00. The paper market is testing support at $2600.00, and it seems to be holding in the quiet holiday trade. Given that gold is struggling to hold $2600.00, I would be happy to see it hold this range next year, waiting for the Fed to lower interest rates. This trading model remains the key to future bullish sentiment. Reuters has an alternate view: “Without unexpected geopolitical disruptions, the base case projects gold prices around $2,800/oz, driven by persistent risks and trade war concerns.” My guess is that “persistent risks and trade concerns” refers to the “Trump Effect”.
Investors can now add the above to the mixed bag of figuring out what the FOMC has on their mind for interest rates in 2025. If the Fed does lower rates next year the reasonable case for $3000.00 gold will be obvious and fresh speculative money will join the bullish ranks. This is speculation – but step back and think for a second. When analysts are generally looking for lower gold prices, wouldn’t it be funny if gold surprised the experts and moved to record highs?
Reuters (Sherin Elizabeth Varghese) – Gold steadies in holiday lull as markets eye 2025 Fed moves – “Gold prices steadied in holiday-thinned trade on Tuesday as investors looked ahead to the U.S. Federal Reserve’s interest rate strategy and President-elect Donald Trump’s tariff policies that could shape the metal’s trajectory next year. Spot gold was little changed at $2,616.31 per ounce, as of 9:27 a.m. ET (1426 GMT). U.S. gold futures were steady at $2,631.60. “The current sideways trend appears to be primarily driven by the low liquidity environment,” said Zain Vawda, market analyst at MarketPulse by OANDA. Gold had a stellar year in 2024, poised for its best performance since 2010 with a 27% gain. “A similar rally could occur in 2025, but this will largely hinge on geopolitical developments,” Vawda added. “Without unexpected geopolitical disruptions, the base case projects gold prices around $2,800/oz, driven by persistent risks and trade war concerns.” Bullion is considered a safe investment during economic and geopolitical turmoil. Analysts had predicted that successive record highs in 2024 would set the stage for a similar rally in 2025, fueled by sustained central bank buying, rising geopolitical tensions, and Fed rate cuts. However, the momentum began to wane in early November as the dollar strengthened amid “Trump euphoria”, denting gold’s rally.
With Trump set to return to the White House in January, U.S. investors are bracing for significant policy shifts in 2025, including higher trade tariffs, deregulation, and tax changes, all of which could have inflationary implications. “If (tariffs are) borne out, this would give less room for the U.S. Fed to continue cutting interest rates, and we’ve seen the market already scaling back expectations on that front for 2025,” said Frank Watson, precious metals analyst at Kinesis Money. While the Fed aggressively cut rates in September, November, and December, it has signaled fewer cuts in 2025 due to stubbornly high inflation. Higher rates increase the opportunity cost of holding the non-yielding bullion. Spot silver was unchanged at $29.66 per ounce, platinum rose 0.2% to $941.25, while palladium gained 0.9% to $938.20.”
On the day gold closed up $7.70 at $2620.00, and silver closed up $0.08 at $29.97.
We were closed both Wednesday and Thursday for the holidays.
On Friday the price of gold drifted lower moving between $2630.00 and $2610.00. Not exactly the Christmas Surprise I had hoped for, but investors are happy that our shiny friend has moved from $2045.00 through $2600.00 this past year. I don’t think it’s time to seriously consider $3000.00 gold in 2025 as this market is still settling off late October highs of $2774.00. But the public does not seem to be in a hurry to sell bullion even at these elevated higher prices. A reminder – we will be closed Wednesday July 1st. Wishing you all the best in the New Year!
Reuters (Sherin Elizabeth Varghese) – Gold under pressure from high US bond yields in holiday trading week – “Gold prices slipped on Friday as elevated U.S. Treasury yields dimmed non-yielding bullion’s allure in a holiday-thinned week, with markets focused on President-elect Donald Trump’s return to office and the potential impact of his inflationary policies on the Fed’s 2025 outlook. Spot gold fell 0.8% to $2,614.64 per ounce, as of 10:29 a.m. ET (1529 GMT) and U.S. gold futures were down 0.9% to $2,630.10. “Treasury yields are a little bit higher here, and gold will remain under pressure through the end of today … we are here in a thin holiday market,” said Bob Haberkorn, senior market strategist at RJO Futures. The dollar index headed for a fourth-straight week of gains, reducing gold’s appeal for holders of other currencies, while the benchmark U.S. 10-year yields were trading near their highest level since May 2, which they hit on Thursday. So far this year, gold has surged 27%, hitting a record high of $2,790.15 on Oct. 31. The rally was fueled by the Federal Reserve rate-easing cycle and heightened global tensions. Most analysts remain bullish for 2025, despite the Fed now projecting fewer rate cuts. They believe pockets of geopolitical tensions around the globe will remain elevated, central banks will continue their robust gold-buying spree, and political uncertainty will linger as Trump returns to the White House in January. His proposed tariffs and protectionist trade policies are also expected to spark potential trade wars, adding to gold’s allure as a safe-haven asset. “Next year with central-bank buying, I can see gold topping $3,000 at some point, probably by the summer, if gold continues on the pace that it’s been on,” Haberkorn said. Gold traditionally shines during periods of economic and geopolitical turmoil and thrives in a lower interest-rate environment. Spot silver fell 1.4% to $29.39 per ounce, platinum was down 2.1% at $916.59, palladium shed 1.6% to $910.27.”
On the day gold closed down $21.60 at $2617.20, and silver closed down $0.39 at $29.66.
Platinum closed down $34.70 at $917.50, and palladium closed down $12.80 at $893.60.
Jim Wycoff (Kitco) – “Technically, February gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. First resistance is seen at $2,650.00 and then at this week’s high of $2,655.70. First support is seen at this week’s low of $2,623.20 and then at $2,615.00. March silver futures bears have the overall near-term technical advantage. A two-month-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. First resistance is seen at this week’s high of $30.485 and then at $31.00. Next support is seen at $29.50 and then at $29.14.”
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