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The rally in the dollar today comes after the Dollar Index hit a 3-month low last week. The dollar has been riding the coattails of the Fed, which has so far stuck with its plans for aggressive rate hiking. Next month could bring some key changes to the Fed’s rhetoric, however, and the central bank may not hike rates by 75 points next month, but could go with a smaller 50 or even 25 point hike. The central bank’s commentary will be what moves markets, if anything. Investors want to know what the Fed sees for next year. If the Fed continues to raise rates aggressively, investors may again become increasingly worried about the likelihood of a recession. If the Fed sends a different signal, however, it could alleviate much investor angst and send both stocks and gold sharply higher.

The crude oil market is lower today as some reports have suggested that Saudi Arabia could be considering raising its crude oil output. While any increase is likely to be quite modest, a raise in production does affect the supply and demand equation and could keep pressure mounting on prices.

The threat of Covid also remains a key market topic. China, the world’s second-largest economy, recently reported its first death from the virus in six months. Reports have suggested that infections in Beijing have more than doubled in recent days. This could mean more lockdowns might be necessary. The fear of lockdowns may keep investors on edge this week, as risk aversion is already higher on Monday to start the holiday-shortened trading week. Markets will be closed Thursday for the Thanksgiving Holiday but could see some fireworks beforehand. Wednesday will bring some key pieces of data to the market, including the minutes from the latest FOMC meeting. If the Fed appears to sound overly hawkish in the minutes, trouble could brew rapidly for stocks and gold. If the Fed sounds a bit more dovish, however, then stocks and gold could both rally into the holiday.

The gold market is eyeing two key levels for trade in the weeks ahead. The bulls will look to produce a close above the $1800 level. The bears will look to take the market back below the breakout point of $1700 on a closing basis. Whichever side is breached could see the market continue in that direction for some time.