The precious metal is up slightly again today by 0.4% to $4,222 but it’s not signifying much when you look at the charts. Gold had been stuck in a bit of a flag/wedge in November before breaking free from that last Friday. But since then, the upside move hasn’t really took flight. The daily chart shows that the November high of $4,245 is helping to keep things in check for the time being.
While buyers have managed to exert control on the break of the technical flag/wedge, they still haven’t quite gathered full control in achieving the next leg higher. The break of the $4,245 mark is much needed to secure that in order to try and make another attempt of the highs near $4,400 in October.
So, what’s next for gold?
The seasonality chart dictates that December and January have typically been strong months for gold, in particular the latter. But in recent years, January’s strength seems to be frontrun in December although that wasn’t quite the case in 2024. Before that, gold has been on a tear in posting seven straight years of monthly gains in December stretching all the way back to 2017.
So while there are fundamental and technical considerations to be aware of, let’s not forget that gold has also typically enjoyed strong seasonal showings during December and January more often than not in the past 20 years. The simple argument might suffice in saying that the precious metal should see a better performance as we look to the turn of the year.
This article was written by Justin Low at investinglive.com.