Gold (GC=F) is trading at a six-month high thanks to in part to central banks’ purchasing of the precious metal Yahoo Finance Markets Reporter Jared Blikre breaks down the charts.
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Video Transcript
– Meantime, gold rising to a six-month high today driven by a weaker dollar and bets on a conclusion to US interest rate hikes. Yahoo Finance’s Jared Blikre has the details. Jared?
JARED BLIKRE: Hey, guys. What a morning. Let’s see if we can find gold on my leaderboard here. We’ve seen some movement pressing above $2,000 for, I don’t know, is it the fifth time, the sixth time? But nevertheless, it’s been pressing up against that level.
Here’s what it looks like over a three-year time frame. And you would say correctly, well, this is simply a sideways market, and it happens to be at the very upper end of this range. Let me show you a five-year, and you can see a little bit different story. It’s simply been flagging here at elevated levels for some time.
And maybe the 20-year gives another added dimension here. We’ve come up to about the 1,800 level. That was what, 2012, 2013 and there. And then we’ve had this very, very long consolidation near the highs. Now, one of the things I want to point out, we have a lot of buyers of gold, not the least of which is retail.
But let me show you what central banks have been doing. Going back to 2010, this shows you how many tons they’ve been buying each year. This is last year. This was 2022 . And that horrible year for the markets. That’s when we saw interest rates shooting up.
Nevertheless, central banks wanted to own gold. And I think that says a lot about the yellow mellow– metal, excuse me. You’ll notice that this line, this bar for 2023 is a bit shorter than this one. This is only through the third quarter. So this could very well conceivably add considerable height to this into the end of the year.
We’ll see if we can eclipse that 1,000 ton mark. Let’s get a check of the other indices going on today. Let’s take a look, for instance, at the S&P 500 futures. NASDAQ as well. As I navigate down here. There we go. We can see that the– excuse me. Here. There we go. S&P 500 futures.
And it takes– we spent most of the morning here since about 12:00 PM midnight in red territory. But you take a look at what happened last week. This is a five-day look. We did have kind of a nice rally. The indices posted about 1% on. And also, I should point out that as I’ve been pointing out, this is the bullish– most bullish time of year, this three-month period right here, especially considering Thanksgiving into the end of the year, which is a Santa Claus rally.
So there’s lots of expectations, and a lot of investors are playing catch up here. You got to imagine, if you’re a portfolio manager on Wall Street, and you are so far underperforming in the market this year, the way most hedge funds are, there’s going to be a game of catch up into year end. And I think that’s what we’re seeing here with the breadth of the rally, just kind of taking everything up with it. And even meme stocks, guys. You thought meme stocks were done. Wait until the end of the year here, 2023. There you go.
– A bit of a worrisome sign. But again, we’ve been talking about this FOMO rally, the FOMO trade, at least right now in terms of portfolio managers doing everything they can to catch up to some of that outperformance that we’ve been seeing, specifically in those tech names leading up to the final weeks of the year. Jared, thank you.
