It's a bit tough this time around with gold prices rising over 27% already in 2024. Things have cooled in November and December so far but arguably that's largely due to on the outcome of the US election, which also affected the election. The Fed forecast something for next year. A rising dollar has helped keep things under control, at least for now.
With gold poised to recapture its hot streak in December (there's still time to regain that of course), is January – usually gold's favorite month – also at risk?
The recent seasonal pattern also suggests that January is the best month for gold over the past ten years. However, that was not the case in the post-pandemic era. It can be argued, to some extent, that there is some progress in December shopping. But maybe it is related to China also struggling in this period? After all, that gold rush is always thought to come through before the Lunar New Year celebration.
That being said, China itself has loved gold over the past 12 months. That's despite what the average purchase data might suggest.
Looking ahead to next month, there are a couple of things that could put gold back on track to start the new year. The big one of course is that market players have a fresh memory of a more hawkish Fed from last week. That has put the dollar in a good place and we could see broader markets picking up from that move at the start of the year.
The other is that gold has suffered a bit from a technical perspective in the past week. We have seen prices dip below the 100-day moving average for the first time in over a year but gold buyers have spared it in recent sessions. The key level is currently seen at $2,616 and the price is trading above that at around $2,635 today. That said, it's hard to look into things when liquidity conditions are thin but this will certainly be a place to watch when we start normalizing next week.
If buyers can maintain technical discipline, that will be a good incentive for gold to continue the January trend.
