Dukascopy TV interviewed Carley Garner, an experienced futures broker at DeCarley Trading, regarding the gold market.
"Gold is an emotional market, no matter what happens in 2017 we are likely to see plenty of action in Gold." - Carley Garner, DeCarley Trading.
1. Gold futures finished higher at the beginning of this week, stabilizing after suffering a sixth weekly loss in a row and touching the lowest level in more than 10 months last week. Do you think this is the end of Gold's bearish run for the time being?
I think we are getting close to some sort of a low in gold but knowing how the light trading volume of holiday markets tend to extend trends, I doubt we will see any sort of meaningful upswing until early-to-mid-January. In truth, the seasonal tendencies for gold in the month of December appear to be changing from the historical norm. When looking at statistical price data over the previous 30 years there is a distinct bullish bias for gold going into the end of the year. However, if you narrow the data down to the last five occasions, and adding this year to boot, gold prices have seen sharp declines in December. That said, there is some hope for the bulls; the market has had a strong tendency to rally on or about January 7th through early February.
2. According to the US Federal Reserve and numerous economic data, the US economy is strong again. Do you think traders will flock to riskier assets or is there still enough global and market uncertainty to keep gold attractive?
Traders have been flocking to riskier assets in the wake of the US Presidential elections, and that trend has been fueled by positive economic data. However, as we’ve learned over and over again, market themes change quickly. Things probably aren’t as great today as they seem, just like last year around this time things weren’t as bad as they appeared to be. Accordingly, we believe the majority of the reallocation is behind us and the current trends of higher equities and lower gold and Treasuries will likely reverse as we move into 2017.
3. 2016 has been a very active trading year for Gold when considering the big market movers such as Brexit and the US Elections. Looking at 2017 we have Article 50 being invoked and the commencement of Donald Trump's presidency do, you see 2017 being another active trading year for Gold?
Gold tends to be an emotional market. Regardless of which event risk are on the docket, we’ll likely see plenty of action in gold. After all, few would have predicted the chaos that ensued after Brexit in the election. When it comes to gold prices, there will always be skeletons in the closet.