Gold: Are you ready for the seasonal annual low?

Last Updated: 22. November 2023By

Despite usually expecting the lowest gold price of the year around November 28th, this year the chart is not conforming to that pattern. Our lowest gold price of the year is expected to be around $1,800 USD, yet we are currently almost $200 USD higher. We are closer to the yearly high of $2,081 USD, which is also the all-time high. Perhaps the prices will follow the pattern and continue to increase, which would make sense since the bullish season has just started.

This shows that seasonality is simply an average that we cannot always rely on. Yes, in most cases the low gold price is reached in late November, but this year we are making a temporary high instead. Unless prices drop in the coming days, which looks unlikely.

Looking at the chart, the EMA 10/20 lines, which were discussed on Monday and Tuesday, have been left in place. This is a good example of when we should not use this strategy. The EMA 10 on a weekly basis crossed the EMA 20 downwards in mid-August, generating a sell signal. This was not entirely wrong as the prices fell almost to $1,800 USD after the signal, having previously either risen or remained the same.

At the end of October there was a buy signal when the EMA 10 crossed the EMA 20 upwards. Prices were at a local high, which is where we have now returned to. In between, there was a short pullback. If the trend is now correct and the buy signal, like the sell signal, eventually leads in the right direction, we could soon see a new all-time high.

Ignoring the averages, it is clear to see higher highs and higher lows, indicating an upward trend. Therefore, there is a good chance that prices will continue to rise. Now, we can take seasonality as an additional argument. But does this really count?

Everyone will have their own opinion on this. On the one hand, gold prices are usually on the rise right now โ€“ regardless of where the prices are at. This is bullish. If seasonality is wrong about the low, it could still be right about the usual increase, in which case we will just rise from a higher level.

On the other hand, seasonality is completely wrong about the yearly low this time. This can happen, but it is not necessarily a reason to trust it this year.

Conclusion Whether we rely on the usual seasonal pattern or ignore it this year, the chart alone looks like prices are set to continue growing. If we can break through the last highs of around $2,000 USD, it could easily reach an all-time high, although this may not be until early 2024.