The outlook for gold has been improving since the US10Y bond yield appeared to cap out around the 4.35% region at the end of October last year. The USD also gave up its September high adding to support for gold.

One of the expectations for this year is that the US economy is heading towards a stagflationary one with high inflation and low growth. Many analysts see a stagflationary environment as positive for gold. So, is this time for gold’s seasonals to play out?

Over the last 15 years, gold has gained 11 times between January 6 and February 23 with an average return of 4.37%.

Major Trade Risks: The main risk here is that incoming US data will prompt the Fed to need to move rates higher that the current 5.1% the Fed projected. Higher US rates would be a natural headwind for gold and these risks are significant with this outlook.

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