It’s Getting to Feel a lot Like a Gold Christmas Rally

Although gold does not have seasonal tendencies like many commodities such as grains, there are holidays that boost demand like Diwali in India, and Chinese New Year’s. There has also been a recent trend of gold railing between December and January over the last few years.

In fact, since 2013 gold has closed higher in January when compared to its closing price in the prior December for the last four consecutive years.

In 2013 gold closed at $1196 in December, and closed at $1240 in January 2014, and closed just above $1300 per ounce by the end of February. Gold closed at $1181 in December 2014 and in January 2015 closed at $1277.

In December 2015 gold closed at $1061.90, and closed at $1100 in January 2016, and $1233 by February. Gold closed at $1145 in December 2016, closing over $1200 in January 2017, and $1256 by February of that year.

In December 2017 gold closed at $1301, and closed at $1345 in January 2018. The closing price for gold in December 2018 was $1282, and then closed in January of this year at $1326.

Whether or not we will see the same occurrence this year between 2019 and 2020 is still to be determined but based upon the last four years of price moves it seems quite possible.

Today gold traded moderately higher, and as of 4:40 PM EST is pegged at $1489.10, which is a net gain of $8.20 on the day (+0.55%). On a technical basis what is significant is that gold opened today at $1482.40, which is just above its 50-day moving average currently at $1480.40.

Throughout the remainder of the day gold traded and closed above that critical price point. In the mind of a market technician as long as gold can maintain pricing above the 50-day moving average it indicates that gold currently is in a bullish trend. If the trend continues the 50-day moving average will define a critical level of support.

Currently resistance can be found just below $1500 per ounce and is based upon two technical studies. The first study is the 100-day moving average which is currently fixed at $1497.40, and right at that same price point is the 23.6% Fibonacci retracement which is fixed at $1496.10. The fact that both of these studies occur roughly at the same price point is significant in that it strengthens the likelihood that this price point will be an area of resistance. Add to that the fact that just above that is the key psychological level of $1500 an ounce. But if history repeats itself as it tends to do and this year mimics the last four consecutive years in terms of price moves between December and January than we could be certainly in for a Christmas rally and a New Year’s rally.

We want to wish all od our subscribers and great holiday season.

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Wishing you as always, good trading,