Gold posted an impressive one day gain on Friday and is once again closely gravitating to the $1200/oz level:


The $1200 level holds significance for a number of reasons as we enter the final 3 trading sessions of 2014:

  • The 2013 closing price for gold was $1204.80 - whenever a market is ending near the flat-line for the year it often serves as a magnet for price (we saw this in the S&P 500 at the end of 2011)
  • There is a huge volume-by-price bar at the $1200 level which highlights how much volume has been traded around this level during the past several months
  • The 50-day simple moving average (SMA) and recent downtrend came in just shy of $1200 on Friday - a push above $1200 early next week would break the recent downtrend and a close above the 50-day SMA would be the first annual close above this key daily moving average since 2010
  • $1200 is a sensitive all-in cost level for many gold producers with Newmont Mining (NEM) going so far as to link its dividend payouts to gold prices averaging above $1200/oz


The final 3 trading days of 2014 should be very interesting for gold investors & traders; the final few days of the calendar year have not been kind to the yellow metal in recent years, however, January offers very strong seasonality for gold.