Stephen Innes
SPI Asset Management
Gold markets
Gold got a lift from the move lower in US yields, and with Fed on hold forever narrative setting in, making it difficult for yields to rise, gold should remain supported on dips.
And given that the current tariff could eventually take its toll on H1 growth, there could be even more downside pressure as yields, and they could subsequently decline materially despite a positive outcome to the trade talks.
And with the Fed possibly expanding the balance sheet again in 2020, amid a plethora of macro uncertainties, it reinforces the notion that gold should be a regular feature in one's asset allocation during periods of market uncertainty, especially when interest rates are low.
The recent history of gold seasonally doing well in January (+5.22% for 5yr trailing average,) strengthens the case for gold to push higher in early 2020, not to mention US election political risk beckons a gold revival.
Ultimately with US rates on hold indefinitely, it should cushion golds fall on a knee jerk sell-off on a decisive phase one outcome. Also, the fed on hold forever narrative should tarnish the US dollar demand but support the glittering gold appeal.
IN the meantime, it's back to December 15 watch.
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 flirts with daily tops near 1.0730
The continuation of the selling pressure in the Greenback now lends further oxygen to the risk complex, encouraging EUR/USD to revisit the area of daily highs near 1.0730.
USD/JPY looks stable around 156.50 as suspicious intervention lingers
USD/JPY remains well on the defensive in the mid-156.00s albeit off daily lows, as market participants continue to digest the still-unconfirmed FX intervention by the Japanese MoF earlier in the Asian session.
Gold holds steady above $2,330 to start the week
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Week Ahead: Bitcoin could surprise investors this week Premium
Two main macroeconomic events this week could attempt to sway the crypto markets. Bitcoin (BTC), which showed strength last week, has slipped into a short-term consolidation.
Five Fundamentals for the week: Fed fears, Nonfarm Payrolls, Middle East promise an explosive week Premium
Higher inflation is set to push Fed Chair Powell and his colleagues to a hawkish decision. Nonfarm Payrolls are set to rock markets, but the ISM Services PMI released immediately afterward could steal the show.