Main takeaway 

It's amazing what happens to risk markets when the Feds stop sprinkling monetary policy fairy dust on it.!

Fedspeak backlash

Investors are not in the least bit enamoured by Fed speak overnight as they were hoping for a bigger bang for their investment buck that the Feds would slash the fund's rates by 50 bp July. 

With Powell and Bullard walking down some of the posts FOMC dovish views, Asia risk markets are having a bit of conniption fit but none more so than Gold, which is carrying the moniker as the pain trade of the day after selling off to just below $1405.

 I can't help but think Gold prices will trading very much inversely correlated to the USD for the then next few days, but more short-term pain will come if the Euro falls below the 200dma 1.1346 which could trigger a more significant Gold flush.

Core Gold View

I remain bullish Gold and continue to remind myself that when playing, risk markets if there is no pain, there is no gain as corrections are part of the process. 

We’re in the early stages of US weaker dollar policy (I think), the US-China trade war will morph into a cold war, interest rates most assuredly stay lower for longer, and the never-ending middle east saga endures. So, the gold rally is supported by some dominant narrative.


There has been a slight picking up in hedging against a protracted trade war risk most convex and liquid instruments. The markets are not flashing red, but there is a zero impulse to buy, suggesting G-20 is clearly on the market's mind.

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