December is historically a very strong seasonal period for gold, but prices fell in the month for the first time in eight years. December’s decline was mild from $2,653 to $2,623, but it was a disappointment after the month began with China’s central bank announcing it had resumed gold purchases for the first time since May.

The latest round of Chinese data will be released around January 7 and should be another market driver. China’s poor start to 2025 stock trading is also a driver as domestic investors give up on the idea of ​​real stimulus, particularly on the consumption side.

Elsewhere, eyes are on interest rates and the dollar. US yields are down 1-3bps across the curve today, but the US dollar is significantly higher. To repeat gold’s big gains in 2024, we will need a turnaround in the US dollar.

For now, however, the usual period of seasonal strength runs through January and with today’s $30 gain, gold is now slightly higher than early December.

Technically speaking, the rally above the late December high along with a series of higher lows is constructive. There is not much resistance to the $2720 level.