Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

Jordan
Dufee

Analyst
By the same author
More articles

Gold: The stars align

share with twitter share with LinkedIn share with facebook
06/20/2019 | 12:54pm EDT

Gold is getting very close to 2014 levels at more than USD 1380 per ounce. The commodity returns to the forefront, in a relatively sparkling way for this asset, up by more than 8% since the end of May. The multiple bullish relays, detailed several times in this section, are jointly intensifying, laying the foundations for a positive environment for the golden metal.


First, gold purchases on behalf of central banks continue at a steady pace. It is now the turn of the Philippines and Serbia to increase their gold reserves, again with the aim of diversifying their foreign exchange reserves.

Still on the central banks' side, the probability of the Fed reducing its rates by a quarter of a point as early as its meeting on July 31 is now close to 100% on the CME FedWatch barometer. A month ago, the ratio was limited to 12%. This is not without reminding us that real interest rates will remain permanently low, a bullish justification for gold prices, which by definition do not provide any return.

In this context, the US dollar is losing ground, particularly against the Indian rupee, but not against the yuan, which remains under pressure due to the trade war.

Last but not least, the last support is linked to the strained relationship between Washington and Beijing, which do not agree on the trade issue. The escalation of tensions is taking shape on all fronts, which is naturally accompanied by an increase in risk aversion, synonymous with support for active refuges.

It is in this context that the USD 1300 bar shattered, putting an end to the consolidation movement that had been in place for three months. The primary movement thus regains its rights, in the direction of the increase. The previously unbreakable "wall", which can be defined between USD 1365 and USD 1375, is also on the verge of collapse. Its overflow into the fence would then release new upward potential and put an end to 6 years of horizontal lateralization.


Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED -3.35% 1.3 End-of-day quote.-32.11%
EURO / US DOLLAR (EUR/USD) 0.15% 1.18274 Delayed Quote.5.33%
GOLD 0.35% 1908.7 Delayed Quote.25.13%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) -0.11% 6.7044 Delayed Quote.-3.98%
share with twitter share with LinkedIn share with facebook