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Gold knocked off perch above $1800 in thin pre-holiday trading
Despite rangebound year, gold is poised to finish 2021 with the highest average price on record
(USAGOLD – 12/29/2029) – Gold was knocked off its perch above the $1800 mark in thin pre-holiday trading. It is down $11 at $1796.50. Silver is down 18¢ at $22.86. As we approach year-end, it looks like gold will finish the year down 7.5%, and silver, down about 16%. As we have reported consistently all year, though prices have been rangebound, demand for the precious metals incongruously has run at record levels as investors shore up their portfolios against an uncertain future. Market analyst Adam Hamilton is optimistic about the new year. He sees gold as being on the cusp of a major breakout based on what he calls “technicals wound up in a gigantic bullish pattern.”
“But the major trend shifts that earn smart contrarian traders fortunes are never apparent with a myopic short-term focus,” he says in a piece posted at the Seeking Alpha website. “Much-broader perspective is necessary to see when probabilities favor key transitions from uplegs to corrections and vice versa. Layered on top of gold’s core fundamental analysis from my last couple essays is a gigantic bullish technical pattern. It is winding ever-tighter, portending a major breakout. Gold felt awesome in 2020 because it blasted 25.1% higher, and bearish in 2021 because it has dropped 5.7% year-to-date. But prevailing gold levels are actually better this year than last year, as gold averaged $1,798 so far in 2021 compared to $1,773 in 2020! (Please see our Chart of the Day) Gold has largely spent this year consolidating high, digesting its huge gains from last year. That consolidation has formed a huge bullish pennant formation.”
Chart of the Day
Sources: St. Louis Federal Reserve [FRED], ICE Benchmark Administration
USAGOLD note: As Adam Hamilton points out above, it is interesting to note that even though gold looks like it will finish the year on the downside, it is still poised to post its highest average annual price ever at just below $1800 per ounce.
