Market Analysis: Gold – bulls with the advantage on their side into the start of 2019

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  • 03.01.2019
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Gold Bulls - Market Analysis

The outlook for Gold in the start of 2019 can be considered very positive from different perspectives. Not only did the precious metal take on serious momentum after the dovish rate hike of the FED in December, Gold also gained further with the US shutdown from 22 December onwards. And even if the shutdown will occur sooner rather than later, and then end after democrats regain majority in the House, to vote on legislation to end the shutdown without adding funds for Trump’s wall against Mexico, that doesn’t necessarily mean that Gold won’t reconquer the mark around 1,300 US/ounce in the days to come.

Forex Calendar - Economic Announcements

Source: Economic Events 02 January 2019 – Admiral Markets’ Forex Calendar

This is especially true if the incoming data around the ISM, ADP (Thursday) and NFPs (Friday) disappoint, but also because Gold faces a seasonal strong window in the days ahead. During the time span from 7th January till 18 January, January Gold gained over the last 20 years 15 times, and averaged a profit of 22.16 USD/ounce. The five years that Gold lost, it showed an average loss of 10.98 USD, with a maximum drawdown of 23 USD. With this pattern in mind, the advantage can clearly be found on the upside, and a push towards 1,300 USD/ounce has a good chance, from a technical perspective as long as we trade above 1,233 USD on a daily time frame.

Gold Daily Chart

Source: Admiral Markets MT5 with MT5SE Add-on Gold daily chart (between 26 November 2017 to 01 January 2019). Accessed: 01 January 2019 at 1:00 PM GMT – In 2013, the value of Gold fell by 28.1%, in 2014, it fell by 1.7%, in 2015, it fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, meaning that after five years, it was down by 21.9%. – Please note: Past performance is not a reliable indicator of future results, or future performance.

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