Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
Kitco News senior analyst Jim Wyckoff believes gold prices will continue to consolidate next week. The prices will move sideways as traders wait for the next major fundamental catalyst. Spot gold last traded at $2,633.02 per ounce, up 0.04% on the day and down a cumulative 0.60% for the week.
This week, of the 12 analysts participating in the Kitco News weekly gold survey, five analysts (42%) expect gold prices to rise in the coming week, while another five (42%) expect prices to consolidate further. The remaining two analysts (17 per cent) expect the price of the precious metal to fall.
Meanwhile, of the 116 investors who took part in the online survey, 70 retail investors (60 per cent) expect the price of gold to rise in the coming week, while 23 (20 per cent) expect it to fall. The remaining 23 investors (20% of the total) expect gold to continue to move sideways in the short term.
And according to data just released by the US Labor Department, non-farm payrolls increased by 227,000 in November, higher than market expectations of 200,000, the largest increase since March 2024.The unemployment rate rose to 4.2% in November, the highest since August 2024.
After the data was released, the dollar index briefly fell nearly 30 points as traders bet on the possibility of a rate cut in December, and spot gold briefly advanced by $12, hitting as high as $2643.16 per ounce.
Bill Adams, chief economist at Comerica Bank, noted in a report to clients on Friday that after the December decision, the Fed will likely switch to a quarterly pace of rate cuts, followed by rate cuts in March and June next year. If the government then enacts policies to accelerate growth, raise prices and/or tighten the job market, the Fed could pause its rate cuts in the second half of 2025.
Economists point out that next week will release November’s Consumer Price Index (CPI) and Producer Price Index (PPI) data, which will play a role in supporting gold prices if the data provide the Fed with room to cut rates.
However, some market analysts say a bigger catalyst than stabilising inflation needs to be seen.
Christopher Vecchio, head of futures and foreign exchange at Tastylive, said that there is a lot of bullish support for gold in the medium term, but that there is a growing downside risk for gold in the short term as speculative positions remain at high levels. He noted that the longer gold continues to consolidate, the more likely speculative traders will take profits. Prices will need to break through initial resistance at $2,725 an ounce if they are to attract fresh momentum.
Jesse Colombo, an independent precious metals analyst, says gold remains in a confirmed uptrend despite increasing downside risks. He believes that prices would have to fall below $2,500 an ounce to cause significant damage to the precious metal’s year-long uptrend. Central bank demand and institutional demand mean that gold has solid support, which means the market will not really collapse.
Although investors will have to wait until 18 December to see the Fed’s monetary policy decision, other central banks around the world, including Australia, Canada and the European Central Bank, will be releasing interest rate decisions next week. Analysts point out that falling global interest rates make gold even more of an attractive asset.
