One of the most pronounced trends in metal markets is gold’s gains around the turn of the year. If you notice you can see that the seasonal pattern becomes very strong after the middle of December. That is not for no reason. The middle of December marks the last Fed meeting, so investors are often confident to take their gold position once the path for US yields and the USD is more predictable with the Fed having finished their last interest rate meeting for the year.

One of the most important factors for the Fed right now is the US labour market. A strong labour market is seen as inflationary and a weak labour market is seen as deflationary as we have explained on many occasion before. So, on Friday, if we see jobs come in below market’s minim expectations of 110K  and hours earnings below 3.9% and a drop in average weekly hours too below  34.2 then watch gold surge ahead of the last Fed meeting of the year on December 13!

The major trade risk here is if the Fed stress the need for further interest rate hikes as that will likely lift the USD, send yields higher, and that will naturally weaken gold.

Remember don’t just trade it, Seasonax it!