Gold is down 1.3% on the month and the decline this month largely stems from a more hawkish Fed from last week. Barring a stirring rally in the coming week or so, gold looks poised to snap its seven year win streak in December in 2024 trading.

In the past decade, December is the second best month for gold behind the usual January rush. The latter has been a bit mixed in recent years but December has proven to be quite a consistent trend. That is up until now I guess.

The difference this year for gold is that it has observed nine straight months of gains prior to November. It is quite an unprecedented run as seen with the monthly changes above. And even with the recent decline in the past two months, it is still up nearly 27% this year. That puts gold on course for its best performing year since 2010.

So, one can argue that the consistent hot streak this year sort of takes away from usual buying rush in December and perhaps next month in January. That especially with conditions lining up for some profit-taking amid a more hawkish Fed and some technical obstacles.

For now, gold is moving back up above its 100-day moving average of $2,609 as it trades at around $2,617 currently. That’s a key line in the sand to watch in the weeks ahead after the recent double top at the 25 November high of $2,721.

If sellers can push the boundaries to hold a break below the key level, that will set the foundations for another potential break of the seasonal indicator when we get to January trading.

This article was written by Justin Low at www.forexlive.com.

The Biden administration has just announced a trade investigation into „legacy“ Chinese-made semiconductors today. And that could see it lead to more tariffs on chips from China that are used for autos, washing machines and telecoms gear among other things. This „Section 301“ probe is coming just less than a month before Trump takes office on 20 January 2025. The officials say that the investigation will then be handed over to Trump’s government for completion.

If anything, it just creates another avenue for Trump to impose hefty tariffs on China amid threats of a 60% tariff slap.

As for Biden, this builds on his escalation in this space over the last few months:

• US reportedly finalises steep tariffs on China, with many to begin on 27 September
• Latest US trade restrictions reportedly set to hit China’s semiconductor industry
• Biden administration to unveil more tariffs in parting gift to China

The USTR says that the latest probe will target mature-technology chips that power autos, appliances, medical devices, and other goods. The probe is supposedly based on evidence that „China is using anti-competitive, non-market policies to dominate global chip production“.

Once Trump takes office, the investigation will be handed over to his administration accordingly next month. The USTR will be accepting public comments on the probe as of 6 January before plans for a public hearing on 11-12 March next year.

This article was written by Justin Low at www.forexlive.com.

The changes on the day are light and it reflects the lack of appetite or incentive among traders to chase anything on the week. It’s one of those times in markets where there isn’t much of a point in trying to make sense of any moves as trading conditions are exacerbated by thin liquidity.

I mean it is the holiday period after all. For EUR/USD, there are large option expiries around €1.8 billion at 1.0425. So, that might offer some pull factor on the day. But the rest of the week promises to be much quieter.

As a whole, the dollar looks to be ending the year in a prominent spot as it has capitalised on a more hawkish Fed last week. The technicals are certainly siding with the greenback as we enter the festive season at least. And barring any major headline shifts, trading sentiment should pick up from where we are leaving off at the start of next year.

That means one can ignore the movements we’re seeing in markets during this week as they will be largely influenced by thinner liquidity conditions.

It’s the best time to take a step back, review everything, and look to start the new year fresh. To those already enjoying the break, I wish you happy holidays. And to those who aren’t, well try and take it easy.

This article was written by Justin Low at www.forexlive.com.

• Domestic sight deposits CHF 448.0 bn vs CHF 448.2 bn prior

Swiss sight deposits are little changed in the past week, holding at levels seen in the past few months still. That doesn’t suggest any major signs of intervention on the part of the SNB at least. Here’s the trend:

This article was written by Justin Low at www.forexlive.com.

• Prior +0.8%
• GDP +3.3% vs +3.4% y/y prelim
• Prior +3.2%

No change to the quarterly estimate as the Spanish economy remains one of the few bright spots in Europe, especially with the two biggest economies – Germany and France – collapsing.

This article was written by Justin Low at www.forexlive.com.