Historically, the final stretch of calendar between thanksgivings to the end of year has always been considered to be one of the most lucrative periods of the year for Commodity traders – And once again, that trend is certainly living up to expectations!
Gold Surging Prices and the Anticipation of Fed Rate Cuts
On Monday, Gold prices surged to a six-month high of $2,018 an ounce amid growing expectations that the Federal Reserve is done with its aggressive interest rate hiking campaign and will deliver multiple rate cuts next year.
Gold prices have been on a parabolic run since the beginning of October – rallying from near the $1,800 level to above $2,000 an ounce on multiple occasions this quarter – holding firmly onto an impressive gain of over 21%, from this time last year.
The bullish momentum has also split over into Gold priced in other currencies such as British Pounds, Euros, Australian Dollars, Chinese Yuan and Japanese Yen – sending prices skyrocketing to all-time record highs.
The big question now is will Gold price in U.S dollars be next to hit all-time highs?
Only time will tell, however one thing we do know for certain is that traders are rotating into Gold at one of the fastest pace seen in more than three years – signalling a growing appetite for the precious metal as markets call the peak in interest rates.
Whichever way you look at it, one thing is clear. The stars appear to be aligning for Gold, which ultimately suggests it won’t take much for prices to breach new record highs in the coming weeks and months ahead.
Looking ahead, the major macro events that traders will be watching closely this week for clues on the markets next big move will be U.S Third Quarter GDP, the Fed’s preferred measure of inflation – PCE Inflation data as well as a host of Fed speeches, which always have the potential to move the prices significantly.
Saudi Arabia’s Oil Strategy
Elsewhere this week, all eyes will be on the hotly awaited OPEC+ meeting, scheduled for Thursday.
According to reports, the group is considering a further production cut of up to 1 million barrels a day to help stabilize the market, in addition to Saudi Arabia extending its existing voluntary cuts until the end of the first quarter of 2024.
With every day that goes by, Saudi Arabia’s breakeven Oil price continues to climb higher due to the unprecedented spending splurge from its Sovereign Wealth Fund on buying expensive footballers and building revolutionary mega cities to host the 2034 football World Cup.
Currently, Saudi Arabia’s “breakeven” price for Crude Oil sits at $100 a barrel – And as we have already seen, the Kingdom is prepared to do whatever it takes to achieve that goal!
Extraordinary times create extraordinary opportunities and right now, these markets are a trader’s paradise. Each and every one of these macro events is guaranteed to be a license to print money, which traders will not want to miss out on.
Commodity Price Forecast
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: