In the first week of December, it looked like gold was set for a bit of a reality check after the rally above $2,100 fizzled rather quickly. That saw price dip back below $2,000 but gold bugs have definitely salvaged the situation in a push to a record high close this week. Thinner liquidity conditions may still cast some doubts over the latest move higher but there are points to argue for gold to chase a further move higher heading into next year.
And the seasonal tailwind in January is arguably one of the strongest points there could be in advocating for an extension higher.
Amid lighter trading this week, gold is now at $2,077 and posted a record daily close in trading yesterday. It might be tough to look too much into the moves at the moment but there is definitely a feeling that gold bugs are getting a little too anxious in trying to drag the precious metal past the $2,100 mark and to new heights at this point.
The way I see it, gold is poised for one of two things now. It is either we go off to the races to start the new year i.e. fresh record highs, or we get a notable squeeze lower before buyers reload on long positions. It would really surprise me if we got a quiet and slow January, all things considered.
As for the hesitancy to say which is more likely, it is to do with the fact that I heavily detest reading too much into year-end and thin liquidity moves such as what we’re seeing this week. As such, I still do hold some reservations about the high points for gold on the week currently.