Gold clearly demonstrated a rather turbulent month of results in November and traders should prepare for the potential of additional amusement park like thrills.
Don't let fear prevent profits!
Gold is trading slightly below the 1800.00 juncture, as of this writing as December gets set to start. Speculators who have not been paying much attention may believe that gold has not seen much price action the past four weeks. The precious metal started November near the 1780.00 level and looking at today’s price could be thought as having produced a rather polite gain of only 20.00 USD per ounce. However, this is not the reality because gold traded in an energetic manner, and demonstrated rather turbulent volatility.
On the 3rd of November gold was trading within the 1756.00 vicinity and on the 16th of the month, gold attained a high of nearly 1878.00. After hitting the apex for the month of November, gold slumped and fell to a low of nearly 1777.00 on the 24th. And since then news about the new variant of coronavirus has flourished and has put safe haven investors on high alert without causing any pandemonium as of yet. A high of 1815.00 was seen on the 26th of November, but the price of the commodity has reversed lower since then. Will volatility strike again soon?
Technical and fundamental traders are all likely feeling rather perplexed via the results of gold the past four weeks. The highs made in November tested values not seen since June of this year, while the lows reflected support levels which have been largely acting as a buffer since August with the occasional outlier taking place regarding value. Gold did hit 1720.00 on the 19th of September, and witnessed a flash crash in the second week of August due to an imbalance in the market when a large speculative position caused the price of the precious metal to spike lower momentarily and hit a mark of nearly 1680.00. Cryptocurrency traders aren’t the only ones who get to deal with massive price movements.
Gold Outlook for December
Speculative price range for Gold is 1747.00 to 1869.00.
The question is where gold will go from here. Technically and fundamentally the precious metal should be watched carefully. If the 1800.00 mark continues to see trading below this juncture, but is able to sustain support near the 1790.00 to 1775.00 ratios without breaking substantially lower, this may prove to be a solid area to buy gold and look for upside price action.
Traders are cautioned to use a conservative amount of leverage and make sure their stop loss orders are working. If gold punctures the 1773.00 level it could signal an additional wave of selling, which may test the 1765.00 mark. If this were to take place gold may prove to be massively oversold mid-term.
However short term trading and long term endeavors are completely different prospects. Gold as a long term hold, if it can be bought below the 1775.00 level, looks to be a rather intriguing position. However short term traders need to cope with the prospect of carrying charges, so six month and one year outlooks are not appropriate in most cases.
Gold did show that buyers remain active and the ability of the commodity to climb to nearly 1880.00 in the middle of November is a solid reminder of this fact. Gold will certainly remain volatile, but if a speculator is bullish and wants to buy gold below the 1800.00 level and look for short bursts higher challenging the 1805.00 to 1815.00 ratios, they cannot be blamed. Cautious gold traders may want to wait for another test of lows that flirt with nearby support levels. Gold has the potential from a risk reward scenario to deliver more upside action compared to the possibility of moving downwards violently.