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Gold Is Escaping The 'December Curse' But Silver Isn't - Analyst

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(Kitco News) - Gold is unlikely to end the year at yearly lows, but it won’t be able to escape the December curse entirely, according to one commodity analyst.

Since 2013, gold has carved out a fairly familiar year-end pattern with prices falling to or near yearly lows in December. And during the last month of 2015, gold hit multi-year lows, which has now become the floor in a new bull market for many analyst.

Andrew Hecht, creator of the Hecht Commodity Report, said that negative sentiment is growing in the gold market as prices hover near the bottom end of a narrow range. However, he added that the market is in a very different shape than it was during the past two years.

“It is possible that as the dollar is a lot closer to the lows than the highs this year, precious metals will not repeat their price action of the previous two years,” he said in a recent commentary. “Gold is going into the final month of 2017 with a strong and bullish tone compared to the price action at the end of 2015 and 2016. Higher rates are likely weighing on the yellow metal while the price action in the dollar and geopolitical landscape combine to provide support for the price of the precious metal that thrives during times of fear and uncertainty.”

Despite struggling in its narrowest trading range in more than a decade, gold has shown some resilience, as prices remain up 10% since the start of the year. February gold futures last traded at $1,248.30 an ounce, down 0.31% on the day.

While gold is ending the year with bullish potential, Hecht also warned that it does face headwinds like a weaker silver market.

In 2017, silver has struggled and is currently flat on the year. March silver futures last traded at $16.37 an ounce, down 0.14% on the day.

“Many market participants have thrown in the towel in silver and the metal is not attracting speculative demand in the current environment. The weakness in silver could continue to weigh on the price of gold,” he said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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