The gold bulls could be about to break out with a strong run to Christmas, according to experts.
Pepperstone says that December looks set to be filled with positive price movements, with the yellow metal expected to break out, potentially above the key pricing level of £1,507 ($1,800).
Pepperstone’s Chris Weston, who serves as head of research, said several factors are converging which are supportive of higher gold prices to close out the year. This would set the bulls up for a strong start to 2023, when many expect to see higher prices as Federal Reserve rate hikes slow.
Weston says that December is shaping up to be favourable to gold as we may get an early indication that the Feds are easing up on rate increases, which would create space for gold to move higher.
He said, “The next US CPI print (14 Dec) will be a blockbuster – not just because we get the FOMC meeting the day after, but it could confirm that the U.S. inflation rate may be falling not specifically because of tighter financial conditions through QT and rate hikes, and that still need to feed through the real economy.
“But there is a belief that while supply chains are easing, high prices are feeding on themselves, and inflation is falling on more organic factors – high prices being the cure for high prices – a factor which could be confirmed in Nov U.S. CPI report, and that could radically increase the need to pause on hikes after we see a 50bp in the December FOMC – a gold positive.”
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