Gold markets have been rather volatile during the month of November, as we have seen a lot of noise in the interest rate markets. As a general rule, the interest rates falling in America should continue to help gold, but we have a couple of major data points are going to be coming across the wires as we head into the beginning of the month that could change everything.
Core PCE will come out on December 1, which is a major indication of inflation in the United States and a favored indicator that the Federal Reserve will use to determine monetary policy. Beyond that, we also have the usual jobs numbers, which have been stubbornly bullish. When trying to bring down inflation, the Federal Reserve will try to drive down demand, and wage inflation continues to be a major problem.
- It’s also worth noting that there might be a general shift in perceived attitudes when it comes to the market, as the shift may be from interest rates to the idea of a recession.
- Events going to be the case, then gold may be a bit of a safety play.
- From a technical analysis standpoint, we have seen the 50-Week EMA offer resistance, and it does look like the $1800 level above is going to cost some issues.
- If we were to break above there, you would obviously be a very bullish turn of events and we could see gold really start to take on.
While there is a huge negative correlation between interest rates, as well as the US dollar and this market, you must make it a point to simply follow price, which recently has been a bit more bullish. The more you look at the $1800 level, the more it looks as if it is going to be interesting. After all, the $1800 level is a large, round, psychologically significant number, and if we were to break above their it is a market that looks like we have the “all clear” to go up to the $2000 level. On the other hand, if we turn around and break down below the $1700 level, there’s not much to keep this market from testing the lows that we had recently formed near the $1620 region. Expect choppiness, but keep in mind volume will dry up later in the month.
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