Precious Metals Weekly Market Update - November 29th 2023

Gold prices surged on Tuesday, reaching their highest level since May. Gold now sits firmly above the $2000/oz mark, while silver has reached $25/oz. Despite positive developments on the Gaza war front, gold continues to demonstrate an impressive performance.

One of the major drivers for this recent rally had been a declining US dollar. The USD is near a four-month low and has declined 4% in the last month alone. This reflects the growing expectation that the Federal Reserve will initiate interest rate cuts in the coming year. 

Market analysts seem to agree that gold is poised to continue its upward trend as long as the USD and bond yields continue trending downwards, noting that there are currently no major market factors hindering gold's ascent toward new record highs. Turning our attention to silver, which is technically super compressed at $25/oz, investors can anticipate substantial upside if the current rally persists. 

Central bank buying (of gold), particularly in Asia, is on the rise, prompting questions about whether this trend is linked to potential geopolitical changes, such as the shift away from the petrodollar to the ‘petroyuan’. While not a new development, recent events have brought this topic back into focus.

Finally, it's timely to note that December historically stands out as the best month for gold over the past 20 years. This trend is followed by strong historical performances in January and February as well.