Gold is set for its first weekly drop in a month, largely fueled by resilient labor market numbers reported this week which have quelled investors’ expectations of a rate cut as soon as March.
A prolonged break under $1,975 for gold could signal more downside to come. The large patterns formed over the past few years still suggest to us that the next major trend is to the upside.
Gold’s breakout upleg into nominal record territory is set to accelerate in 2024. New records generate bullish financial-media coverage putting gold back on investors’ radars.
Traditional thinking tells us that gold should struggle under a period of rate hikes and tight monetary policy. If a 13% climb is gold ‘struggling’ then we’re looking forward to seeing how it does as interest rates come down.
On a daily chart, the bias is still up. So if you were to get under $2038.30 and close under that number especially, you'd have a pattern of lower highs and lower lows and have your first bearish pattern in the market.
The first real test of 2024 is today for bulls of gold, silver and copper. Jobs are the key. Slower hiring, an increase in the unemployment rate is needed for quicker interest rate cuts.
