Gold 2016 A Year in Review

Today marks the final day before traders and investors call it a wrap and begin their holiday season celebration. The overwhelming characteristics that defined today’s trading activity were quiet and subdued.

With that in mind, this might be an excellent time to look at recent price action in gold, and put that action into the perspective of what happened this year. It is also good time to take a look at what has transpired this year, and then, see how this year’s activity fits within a longer-term perspective. When we look at the most recent activity in regards to gold pricing, we see that it has been in a defined correction, which began in July of this year. The correction then accelerated the pace of decline at the beginning of November, and gold’s pathway continues to this day.

Gold began this year trading at approximately $1060. For the first half of 2016, gold rallied from this price to just below 1380 at the beginning of July. After a brief pull back, gold prices traded back to these recent highs, to form a double top in August. After that, gold prices moved lower with an accelerated decline, which began immediately following the presidential election last month on November 8.

As of today, gold has gained in value from the beginning of this year. However, the majority of gains achieved at the beginning of this year were given back. The net result is that, as of this writing, gold has gained roughly $72, when compared to prices at the beginning of the year.

2016 a Pivotal Year for Gold

But this does not tell the whole story. 2016 was truly a pivotal year for gold prices. It contained a key reversal, with a change of price direction and market sentiment.

Prior to this year, gold prices had been in a multi-year decline. In August 2011, gold traded to a new historical and record high price of 1920 per ounce. From that point forward, year in and year out, gold prices declined.

By the end of December 2015, gold had traded to a new yearly low of 1050. That low carried over to the beginning of 2016. From January of this year to July, gold traded as high as 1375, which turned out to be the yearly high. This was the first time that the yearly price high was greater than the yearly price high of the prior year, making 2016 a truly pivotal year.

On today’s Weekend Review, we will take a look at gold’s activity during 2016. We will look at recent price action as it pertains to activity this year. And lastly, we will look at this year’s action overall in relationship to the last five years. 

Most importantly, I want to wish everyone a joyful and blessed holiday season, and of course, as always, good trading.