Stephen Innes
SPI Asset Management
Gold is getting weighed down by higher equities and a stronger US dollar; however, talk of fresh stimulus initially reversed the losses while the easing of lockdown measure continues to limit the upside over the near term.
The balance of risks still favours gold going higher and, at this stage, it’s hard to see what’s changed for gold to shift appreciably lower.
European assets, including the EUR, are on the defensive as markets try to digest the German Constitutional Court’s ECB ruling. There’s widespread concern that a premature end to the lockdown will increase fatalities and see retail demand flooding into gold ETFs.
Although the curve is flattening, Covid-19 remains the hot ticket for gold even if the White House’s contention that the Wuhan lab is the epicenter for the virus outbreak is not viewed as credible. Just the mere thought that US -Sino relations could take a turn for the worse should support gold on dips.
Gold positioning continues to hover near the highs as prices consolidate around $1700 as the market is sitting tight, awaiting the primary catalyst. In addition, some big gold buyers are sidelined while looking to gauge the risk markets’ reaction to how gradual reopening activities play out with fast money, ready to pounce on the first sign of secondary cluster break out.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
Recommended Content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.