Gold starts to come back into the radar amid the seasonal tailwind in December and January trading
However, amid Fed rate hike prospects and the relative uncertainty related to the omicron variant, it isn't going to make things easy to traverse in the weeks ahead.
Typically, the seasonal tailwind for gold kicks in around the middle of the month through to January - the case being demand ahead of the Lunar New Year holidays.
You'd have to go back to December 2013 and January 2014 to find a period where gold failed to post a gain when you put both months together.
As much as this may be one of the more favoured trades to start off the new year in recent times, I fear that this time around may be a little different considering the factors at play as noted above.
The Fed may move to increase the pace of tapering in January and that could spook gold bugs and the technicals itself don't look too encouraging.
Recent price action sees gold continuing to gyrate near $1,800 but buyers are unable to keep any push above the confluence of the key daily moving averages @ $1,791.
That remains a key level that buyers need to work their way through in order to try and push back above $1,800 and contest the key trendline resistance from the August 2020 and November 2021 highs.
Gold is sitting around a short-term trendline support at the moment but I fear we could see a slight flush lower closer to the November lows - and even the September lows perhaps - before buyers find some footing and look to capitalise on the seasonals.
It is a tough one to call at the moment considering the dollar's resilience amid the Fed's hawkishness but one thing working in gold's favour is that at least real yields are still sitting very much in negative territory across the globe.
