Strategist: A choppy price trend could signal a short-term peak

Gold’s recent price volatility highlights uncertainty in global markets as traders react to geopolitical developments and year-end profit-taking. After a sharp 3.5% decline on Monday, following last week’s 20-month peak, gold prices are pointing to a peak soon, according to Ole Hansen, head of commodity strategy at Saxo Bank. Still, the metal’s long-term prospects remain robust due to macroeconomic and geopolitical challenges, he says.

Politics in action

The fluctuations in the gold market this week reflect political developments in the US, particularly President-elect Donald Trump’s major nominations and policy announcements. Prices fell after Trump appointed Scott Bessent, a veteran financial leader, as Treasury secretary. However, volatility increased again after Trump proposed sweeping tariffs, including 25% on Canada and Mexico and 10% on all imports from China, alongside the appointment of Jamieson Greer as US Trade Representative. Greer’s advocacy for strategic decoupling from China signals a potentially turbulent trade landscape.

Could the Santa Claus rally be coming?

Gold posted a whopping 28.3% gain this year, approaching the record annual performances of 2007 and 2010. After hitting an all-time high of $2,658 an ounce in October, prices corrected by $253. Traders can now take advantage of market rallies to reduce long positions before the end of the year. Hansen points to the potential for another “Christmas rally” in December as lower prices provide a more attractive entry point.

Longer-term factors are exerting pressure

Despite short-term corrections, Hansen maintains his optimistic outlook for gold and silver through 2025. Key factors include:

Central Bank Purchases: Diversification away from the US dollar and government bonds.
Interest rate cuts: Make gold more competitive compared to low-interest government bonds.
Safe haven demand: Ongoing geopolitical tensions, including conflicts in the Middle East and Eastern Europe, as well as trade war risks.
Chinese investment: Given concerns about housing markets and low savings rates.
Financial instability: The potential inflationary impact of Trump’s costly policies on tariffs, tax cuts and deportations.

Silver faces challenges below $30

Silver’s impressive 47% rally earlier this year, which peaked at a 12-year high in October, has declined significantly. Support has been identified around $29.70, with additional downside risks associated with weaker performance in the gold and copper markets.

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This article is for informational purposes only. The opinions and analyzes contained herein are those of the author and do not constitute financial advice. The Jerusalem Post (JPost.com) does not endorse or recommend any investment based on this information. Investors should consider their financial situation, investment objectives and risk tolerance before making decisions. It is recommended that you consult a qualified financial advisor. JPost.com is not liable for any investment losses resulting from the use of this information. The information provided is for educational purposes only and should not be considered trading or investment advice.

Strategist: A choppy price trend could signal a short-term peak

ByAmelia Journalton

Politics in action

Could the Santa Claus rally be coming?

Silver faces challenges below $30

By Amelia Journalton

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