Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Ahead of the Thanksgiving Weekend

Commodities / Gold & Silver 2024 Nov 27, 2024 - 10:18 PM GMT

By: P_Radomski_CFA

Commodities Today we finally see it – the USDX moved lower at last. USD’s breather here is nothing surprising, and it’s not bearish either.

It’s simply normal for a market to correct after launching a rally as strong as what we saw in October and November.




In yesterday’s analysis, I wrote the following about the above chart:

Yes, while I have been writing about USD Index’s likely strength and bullish outlook overall, this kind of resilience is surprising even to me. I thought that we’ll see a bigger correction now – after all, the USDX soared by 8 index points without a bigger decline.

We don’t see it now, which could mean that it will still happen in the following days, or that the momentum for the USD is so remarkably strong that it will just consolidate and trade sideways here instead of really correcting.

Either way, after this week, the USDX could be back in the rally mode due to the monthly turning point (vertical, dashed line). My  Monday’s comments on it remain up-to-date:

“Will we see a correction shortly? That’s quite possible. After all, no market moves up or down in a straight line without periodic corrections.

Will the correction in the USDX trigger a rally in gold and miners? I wouldn’t say that’s necessary. The most recent boost that both markets got was based on geopolitical turmoil (a new type of rocked used by Russia), and those tend to have only temporary impact on prices. Today’s move lower in gold and USDX confirms this. So, it is quite possible that we would see a decline in gold and the USD Index at the same time. “

So, yes, the pullback is taking place, which means that the monthly turning point can play out exactly as I had described it earlier – it could push the USDX higher once again. This would likely contribute to declines in the values of precious metals and mining stocks.

Today’s action in the precious metals sector already confirms this bearish outlook.



After the early move up, gold, silver, and miners moved lower. Overall, gold and miners are up, but not significantly so. The key thing is that they moved up in an insignificant manner while the USDX declined in a meaningful way (from a day-to-day point of view only, but still).

PMs and miners had a good reason to rally today – in a big way – and they didn’t. This suggests that they really want to decline in the following weeks. Fortunately, you are already well-positioned to take advantage of this decline. Your profits in the current short position are likely to grow.

Before summarizing, we would like to discuss one specific thing: gold’s performance around Thanksgiving – during the U.S. presidential election years.

The below text is actually based on something that I wrote four years ago. Since it was about an even more distant past, it remains just as up-to-date as it was back then. Of course, I’ll add comments on what happened in 2020.

Gold’s Performance around Thanksgiving

Thanksgiving is on the fourth Thursday of each November, which means that the holiday always falls between November 22 and 28. What’s usually happening to the price of gold before and after this period? Let’s check gold’s seasonality for Q4.



During this period, gold is usually just before forming a short-term top and starting the biggest decline within the final quarter of the year.

Please note that the accuracy measure as to when the top is likely to be is relatively low, but soars right before gold’s plunge. This means that while it’s not that clear when gold is likely to top, it’s quite probable that we are going to see some kind of important top regardless of when exactly that takes place. Could it be slightly ahead of Thanksgiving? Yes. Could it be slightly after it? That’s possible as well. 

But this year is not like other years. This year, particularly this November, is special because of the U.S. presidential elections. Therefore, instead of taking into account the average of the previous periods around all recent Thanksgivings, one should focus on the Thanksgivings which were concurrent with presidential elections.

Gold and Thanksgiving during the Presidential Election Years

Let’s examine the last five cases when gold was already after the 1999-2000 bottom and within its secular bull market.

Starting with the most recent case:



Back in 2020, gold price was after a several-month-long decline, and it reversed soon after Thanksgiving. So, it was an exception from the rule. Perhaps the longer decline preceding Thanksgiving was something that could have indicated that we’d see a turnaround instead of decline’s continuation.



Back in 2016, the decline simply continued after Thanksgiving, and gold bottomed in the second half of December.



Four years earlier, in 2012, gold topped right after Thanksgiving and – just like in 2016 – it bottomed in the second half of December.



In 2008, gold topped right before Thanksgiving, and it bottomed in the first half of December.



Finally, in 2004, gold topped shortly after Thanksgiving, and it formed an initial bottom in the first half of December. However, it then declined once again, further reaching the bottom in January and February 2005 (two separate bottoms).

Consequently, Thanksgiving during the U.S. presidential election year had a bearish follow-up for gold in most cases.

Most importantly, the 2016 follow-up was bearish. This analogy seems most important as that was also the year when Trump won.

This pattern fits in line with my other thoughts on the gold market. As the USD Index appears to be correcting here – and about to reverse based on its monthly reversal tendencies, it seems that gold will have more reasons to decline.

All in all, while there remain some opportunities to gain something extra on gold investments in the long run, the outlook for the precious metals market remains bearish for the following weeks. And the profits from our short position in junior miners are likely to grow further.

Naturally, the above is up-to-date at the moment when it was written. When the outlook changes, I’ll provide an update. If you’d like to read it as well as other exclusive gold and silver price analyses, I encourage you to sign up for our free gold newsletter.

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Tools for Effective Gold & Silver Investments - SunshineProfits.com

Tools für Effektives Gold- und Silber-Investment - SunshineProfits.DE

* * * * *

About Sunshine Profits

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in