December gold futures should continue to maintain weaker levels coming into November and December, averaging 1275 for the last quarter. There are many estimates for the number of rate hikes that we will see in 2018, and their effects on the price of gold depends on who you ask. Right now, there are estimates as high as six rate hikes in 2018 to as little as one rate hike. The most likely scenario is around 3-4 rate hikes in 2018 on top of the expected rate hike in December of 2017. Interest rate hikes are usually quite bullish for the US Dollar Index and bearish for any safe haven asset such as gold. Three rate hikes in 2018 would be sufficient to keep gold in check in my opinion, barring any more North Korean action. Another factor that will continue to pressure gold is the weakening of imports into China and India as two of the world’s biggest consumers of the precious metal. We need stronger imports, mainly from leading consumer India, to help support fundamentals. Many investors don’t pay much attention the all-important gold/silver ratio currently just shy of 75.00 (shown in the chart below, a recent dip). We’ve seen a dip in this ratio indicating that investors are finding more appeal in the rarer metals like silver, platinum, and palladium. A technical perspective reveals that any break below the recent lows of 1263.80 would most likely see a continued washout down to 1250.
Dec ’17 Gold Daily Chart