The Historical Impact of December on Gold Performance
The final month of the year looks set to fuel the ongoing gold rush, with NewEdge Wealth’s Ben Emons highlighting a continued trend of increased demand for the precious metal in December. Emons, head of the firm’s fixed income division, highlighted gold’s historically robust performance, particularly after a stock market rally in November. Gold recently hit a new high, closing at $2,089.70 an ounce, pointing to a possible rise in 2024.
Positive catalysts are driving gold to new highs
Emons attributed the record-breaking gold price to a combination of factors, citing both the economic and geopolitical backdrop as positive catalysts. Uncertainty about next year’s events, including elections and the possibility of a recession, has added to the metal’s appeal. Additionally, Emons noted that gold tends to thrive in a risky market environment characterized by declining real and interest rates. With central banks actively competing for gold amid falling supply, Emons expects a major breakout for the metal and predicts a move towards $2,100. He also highlighted the potential for utilities to take market leadership in early 2024.
Dollar Impact and Analyst Insights
Fast Money trader Guy Adami echoed Emons’ optimism, predicting a bullish trend for gold on the back of the dollar’s recent underperformance. Adami highlighted the inverse relationship between interest rates and the dollar, predicting that a sustained decline in interest rates would provide a tailwind for gold. Since gold has already recorded a 14% increase in value since the beginning of the year, market observers assume that the precious metal will experience a significant upward trend in the near future.
In summary, the confluence of favorable market conditions, geopolitical uncertainties and a weakening dollar is creating the conditions for gold to maintain its upward momentum. As 2024 approaches, investors are paying close attention to a potential breakout that could further solidify gold’s position as a lucrative asset in a dynamic economic landscape.
