Gold prices are inching slightly higher to kick off the new trading as crude oil and stocks attempt to rebound while the dollar loses steam. This week will likely see a return to more normal trading volumes as investors look to position themselves going into the end of the year.
Crude Oil
The crude oil market has been the subject of significant discussion in recent weeks. Oil has plunged by some 30% from its recent highs seen not long ago. The market had a disastrous Thanksgiving Holiday week last week that saw prices decline by over 7% on Friday to market the lowest settlement in over a year. The oil bulls will now likely try to hold the psychologically important $50 per barrel level, but any rallies may be short-lived unless production is cut or there is another fresh catalyst to fuel higher prices.
Stocks
Like oil, stocks had a horrible run last week as well and are looking to rebound today. The market has seen increasing volatility and is showing some serious signs of trouble. The rally in early action today may be nothing more than a relief rally in bear market conditions, and if the market is unable to sustain the rally today that would be just another symptom of a sick market. Market dynamics have arguably seen a dramatic shift in recent weeks, and stock markets may no longer see buying on the dips but may very well see strong selling on the rips. In other words, stocks are now likely to remain under pressure until proven otherwise.
The Dollar
The greenback is slightly lower in early action today yet remains stubbornly close to its recent 1.5-year highs. The gold market may need to see the dollar work further to the downside before making a run at upside resistance in the $1245 area.
All the above markets could be affected by this week’s G20 meeting taking place in Argentina. The U.S. President will meet face-to-face with the President of China. The two nations remain locked in a war over trade and little to no progress has been seen on resolving the matter.
Gold Price Chart
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