In the last week ended November 28, 2024, the rebound in gold prices stalled. Gold bounced from a monthly low of around $2575 but lost momentum. Selling pressure increased after Israel and Hezbollah in Lebanon agreed on a ceasefire.
Gold miners dropped the most in the last month. Newmont peaked at over $55 to close at $42 last week. Barrick Gold (GOLD) fell to levels not seen since August. Gold prices could still strengthen if markets doubt the ceasefire will hold.
In the 60-day agreement, Hezbollah will clear southern Lebanon, retreating north of the Litani River. Israel will withdraw from Lebanon, moving to the south of the Blue Line. Gold ETF investors will watch GLD, GDX, and GDXJ.
If gold prices weaken, it would help Bitcoin (BTC-USD) prices. In addition, the U.S. currency would strengthen, at least in the short term. Early next year, the USD may strengthen further, pressuring both gold, silver, and BTC prices. Investors are expecting the U.S. protectionist stance using tariffs would increase demand for its currency.
Your Takeaway
Both the Middle East conflict and the Russia/Ukraine add volatility to gold prices. However, demand and supply ultimately have a bigger influence on prices. After gold’s strong performance this year, investors expected a modest drop in demand.