Gold Hits Record Highs, Bitcoin's Upward Trend, ISM Remains Below 50, Weekly Chart Highlights

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More charts, less words, primarily Canadian focus.

Lets begin!

Stocks and bonds retreated as traders hit pause following the robust rally in November. The prevailing optimism, driven by expectations of a peak in interest rates, led to a significant 60 basis points drop in the benchmark 10-year Treasury yield in November after reaching a 16-year high of 5%. On Friday, the ISM index for November held steady at 46.7, falling below the consensus estimate of 47.8. This lack of movement provided little clarity to the economic backdrop.

We've emphasized the potential breakout in gold multiple times, and it finally made a decisive move yesterday. After trading within a sideways channel between $2,075 and $1,600 for over three years, it broke out, surpassing the $2,100 level for the first time. Although it has retraced below $2,075 since then. The breakout in gold is occurring amidst what can be characterized as a perfect storm on a macro scale. The US Dollar has declined, accompanied by a pullback in interest rates. Simultaneously, persistent geopolitical tensions, underscored by an incident in the Red Sea over the weekend, have intensified gold's allure as a safe-haven asset. The combination of these factors suggests a favorable environment for gold to thrive within the current market conditions.

The resurgence in Bitcoin and other crypto assets has not gone unnoticed. Since mid-October, they have been gaining momentum, propelled by expectations that the first spot Bitcoin exchange-traded fund (ETF) may soon receive approval.

Gold hits record highs

Gold Monthly Log Chart Spanning Back to 1920

Time for Mining Companies to Catch Up?

Bitcoin

Bitcoin Relative to Gold

ISM Remains in Contraction for Thirteenth Straight Month

In November, the ISM index held steady at 46.7, falling short of the consensus estimate of 47.8, maintaining its prolonged contraction below the critical 50 level for the thirteenth consecutive month. While the New Orders component saw a marginal increase to 48.3, it provides a modest glimmer of hope, suggesting the possibility of the ISM attempting to establish a bottom

Weekly Chart Insights

In light of the morning's attention on Gold, let's emphasize a couple of noteworthy charts from the weekend

A Couple of Charts Showing a Different Trend in Canada

That's all for today.

MARKET UPDATE

Source for all charts (unless otherwise specified): Bloomberg, Mulvihill Capital Management Inc.

Disclosures

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