Gold Prices Today Dip Ahead of December FOMC Meeting

Gold prices today are down slightly 0.8%, but the precious metal has been showing some resilience lately in the face of several headwinds.

While the precious metal has given back about 14% since peaking in early August, it's still up about 12% since its bottom a year ago.

We've seen gold prices test near the $1,160 level twice this past week, and both times it bounced up from there.

gold pricesOnly hindsight will tell us for certain if this ends up being a new low. Meanwhile, there are macro, technical, and sentiment indicators that support that view.

Urgent: Rare gold anomaly - an event so rare, it's only happened twice in 20 years! And it's about to happen again. Find out more.

I think the price of gold will remain challenged in the near term, but within a matter of weeks we could see it resume its natural bull market stance.

The fundamentals remain conducive to higher gold prices, and the fundamentals always win out eventually. Patience will certainly be rewarded.

Before we get to my gold price outlook, here's how the metal has been trending this week...

Gold Prices Today Dip, Here's How They're Trending

gold prices todayGold prices ended last week with a bit of strength. The yellow metal opened for trading on Friday, Dec. 2, at $1,170 and worked its way higher. By the close it had gotten a nice bump to finish the trading week at $1,177.

But Monday was different. Already late Sunday evening gold was seeing selling pressure. By Monday's open it was down $10 to $1,167. But it would rebound slightly to close at $1,170.

Tuesday was pretty uneventful. Gold opened at $1,172 and with a little downward pressure closed out at $1,169.

Wednesday brought a small reversal on the back of a weaker U.S. Dollar Index (DXY). Gold opened at $1,173, ran up midday to $1,178, but then caved to some selling pressure to close out at $1,173.

Thursday's renewed strength in the DXY pushed gold back down. Gold opened at $1,172 and by late afternoon had closed nearly flat at $1,170.

Gold prices today faced some similar selling pressure and were hovering around the $1,160 level in afternoon trading.

Now let's examine the factors acting on gold and where the price of gold is headed now...

Here's Where the Price of Gold Goes Now

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It's a familiar narrative, but still the anticipated December Fed rate hike is being assigned a 97% probability. That's kept the dollar strong, and that means it competes with gold, weighing on its price. But I think once that becomes fact, the market will switch to "buy the news." Right now it's "buying the rumor," and that's pushing the dollar up. Let's see for how long...

Meanwhile, long-term bonds have suffered from a dramatic sell-off. The 30-year Treasury is yielding 3.08% and has been up and around 3% since just after the election. Higher bond yields are competing with gold. But we could see somewhat of a bond rally as they make up for becoming near-term oversold. That would help gold, too.

Last week, I told you the Gold Miners Bullish Percent Index (BPGDM) had just pointed to a possible bottom in gold stocks. Well, the bounce higher has continued in the past week.

gold prices today

We've seen a healthy bounce and a confirmation from the RSI and MACD. If these stocks turn out to be leading gold's bottom, then a rally in the metal itself may not be far behind.

Of course, it's impossible to be sure, but gold looks like it may be forming a base at current levels.

gold prices today

Here too, momentum indicators RSI and MACD are supporting a bottoming process with a potential upward bias.

If we get some semblance of the action a year ago, then the start to this New Year would see golden fireworks. A 10% gain to near $1,300 could happen in relatively short order.

Editor's Note: An incredibly rare gold market anomaly is shaping up in the markets as we speak - one that has occurred ONLY twice in the past 20 years. And it's about to happen again. Details here...

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