Marex Spectron Bullion Thoughts

So, as far as the gold market goes, we have once again had a positive start to the year. This has been the trend for a good few years now and was helped at the end of December by extreme tightness in metal supply over the year end. The market is currently trading at 1315, which is eighty dollars higher from the same time in December, a good rally. I think Decembers early slump was due to bored and disappointed longs in the market, who wanted to either square up or take what profits/losses they had ahead of the year end. The price dropped much further than it should have done to my mind and with the old adage of “buy weakness, sell strength”, was a good opportunity to get in on the long side. New money has come into the market in January and has rallied prices as high as 1325. This proved a step too far and we have now drifted back and are currently meandering around these levels and showing little sign of going one way or the other. I think we may have done enough on the upside for the time being and the market feels a little tired up here. However, as with 2017, we will be in thrall to the dollar, the yields and geopolitical events. These, more than any technical factor or physical demand equation will be the main drivers for gold again this year.

Today sees little in the way of important figures and the market will more than likely follow the dollar.