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Gold Market Overview - Nov 30, 2016

The U.S dollar rally shows signs of fading, and as a result, gold closes November 29th at $1,190.9 per ounce. However, over the long-term, the dollar is still strong because positive U.S economic news makes a December rate hike almost certain. In the U.S economy, housing prices have now hit their highest nominal price in history according to the Standard & Poor’s/Case-Shiller index. However, when adjusted for inflation, prices are still around 16 percent lower than the peak reached during the housing bubble in 2007.



In Europe, the Italian banking sector poses a significant risk to the Eurozone, and a political referendum this Sunday is a wildcard for the markets. These developments are bearish for the euro and bullish for gold.

In Asia, rumors swirl that the Indian government may move to restrict private holdings of gold in its fight against 'black money' and corruption. Chinese premiums on bullion increase in response to the developments in India and fears of restrictions in the Chinese gold market.

Oil futures in Asia jump on the hope that an OPEC production cut will lead to a rebound in prices. According to Goldman Sachs, an agreement could push oil prices into the $50s range. Commodities tend to move in tandem, and any rally in oil will have a bullish effect on gold.