Drivers behind the recent gold rally

World Gold Council/Adam Perlaky

“Gold rallied nearly 4% in December, mainly in the second half of the month, and recently moved to an intraday high of US$1,613/oz as the US-Iran confrontation unfolded. We believe there are a few likely reasons for the move. . .”

USAGOLD note:  In this article, Perlaky runs through six factors driving gold to higher ground over the past few weeks in the paper gold market – four of which are not commonly tracked in financial media including the positive effects of derivatives’ positioning, why light trading volumes have made a difference, and professional investor portfolio positioning prior to the end of the year.  He also offers a few brief thoughts on three drivers that have gotten a lot of attention in financial media – technical charting signals (please see chart below), the Fed’s repo policies and geopolitical risks.  All in all, an informative look at what drove the recent run-up in gold prices.

line chart for gold showing technical breakout, wedge in December2019

Chart courtesy of the World Gold Council


Repost from 1-14-2020

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