Amid some softness in the dollar in the past day, gold is trading back up above $1,800 currently.
But while the yellow metal is trading higher so far this month, there still seems to be something lacking. Looking at the chart:
It is quite easy to see why considering that price action hasn’t broken stride. For the most part, price has been tracking in between $1,765 and $1,800 in the past few weeks. But with the push above $1,800 yesterday, can the gold bugs finally get things going?
Typically, December and January have proven to be a strong seasonal period for gold to shine. I’ve made that point a few times earlier in the month and the latest one here before the key central bank meetings last week.
As mentioned at the time, the dollar’s resilience and Fed’s hawkishness were reasons pinning down gold but buyers tried to make a play for a push above $1,800 in the aftermath last week. That eventually fizzled and price action reverted back to the key daily moving averages @ $1,788-96 but we are seeing some appetite again this week.
Call it thinner market conditions and what not but at the end of the day, the charts are still one of the best gauges of sentiment.
For now, buyers look a little poised but break above $1,815 and that could set the stage for a stronger push towards the key trendline resistance around $1,860 and perhaps even the November high at $1,877 – that is with the seasonal tailwind permitting going into January.