When the US dollar falls and real yields drop too, that tends to be a great environment for gold buying. The last few weeks have seen significant falls in the dollar on expectations that the Federal Reserve has reached the peak in interest rates. A stretched dollar long position and a strong bid coming into bonds have all been highly supportive for gold.
Is this the time to buy gold heading into 2024? The seasonals certainly indicate it may well be. From the end of December through to February gold seasonals are exceptional with a 72% winning percentage over the last 25 years between December 21 and February 24. So although the buyers for gold is more neutral between now and the end of December is this the right technical time to start buying early?
Dip buying ahead?
The major trade risk here will be from the Federal Reserve. If the Fed need to hike rates again – that will be a natural headwind for gold.
Remember don’t just trade it, Seasonax it!