Gold Stages Modest Recovery, and is Once Again Range Bound

Gold is trading modestly higher this morning. As of 3 o’clock EST, gold futures are currently fixed at $1280.80 per ounce for a net gain of $5.50 (+0.42%). After yesterday’s dynamic drop, gold prices have partially recovered. However, they remain trapped within a narrow and defined range.

Physical gold is also recovering modestly, with prices currently fixed at $1280.60, which is a net gain of $4.60. This gain can be divided into two-parts buying (+3.10), and one-part dollar weakness (+1.50), according to the Kitco Gold Index (KGX).

Although there is very little economic data that will be coming out on this short holiday week, the Federal Reserve will release the minutes from last month’s FOMC meeting tomorrow. The release of the minutes will come after gold futures trading closes for the day. With Thursday’s national holiday of Thanksgiving, there will be no reaction to these minutes until the days following the holiday.

As reported in MarketWatch, “Minutes from the most recent Federal Open Market Committee meeting will be released after gold futures settle for the session on Wednesday and before U.S. markets break Thursday for the Thanksgiving holiday.”

Traders, as well as investors, will be looking to glean whatever information is available from last month’s meeting to find information about next year’s monetary policy. However, the working assumption will be that there will be a rate hike in December.

The monetary outlook for next year will significantly influence the dollar, and therefore will be of key importance to gold traders. Consequently, these minutes could be critically important to where gold and silver pricing goes this week.

With the upcoming extended holiday weekend, it is most likely that traders and market participants will see volume decline, especially tomorrow on the eve of Thanksgiving.

This light volume could result in modest and thin trading which curtails any significant price move either up or down. However, it could also result in extreme volatility if an extremely large order is placed within the market.

Wishing you as always, good trading,