One of the most pronounced trends in metal markets is gold’s gains around the turn of the year. If you notice you can see that the seasonal pattern becomes very strong after the middle of December. That is not for no reason.
The middle of December marks the last Fed meeting, so investors are often confident to take their gold position once the path for US yields and the USD is more predictable with the Fed having finished their last interest rate meeting for the year. One of the most important factors for the Fed right now is the US labor market. A strong labor market is seen as inflationary and a weak labor market is seen as deflationary as we have explained on many occasions before.
So, on Friday, if we see jobs come in below the market’s minimum expectations of 110K and hours earnings below 3.9% and a drop in average weekly hours below 34.2 then watch gold surge ahead of the last Fed meeting of the year on December 13!
The major trade risk here is if the Fed stresses the need for further interest rate hikes as that will likely lift the USD, send yields higher, and that will naturally weaken gold.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
Does it really matter, TPTB will slam gold either way.