Gold is in an uptrend, which was formed in March 2021. Gold is bullish, from $1680/oz to $1900/oz, the highest price over 4 months. This bullish trend made significant pressure on this safe-haven asset.
The first CPI Index q/q of this 2021 has skyrocketed to 4.2%, twice as the FED's 2% expected inflation, which made significant concerns in the world's 1st economy. Then, the chairman of US Federal Reserve FED - Jerome Powell, released the meeting minutes to assure investors that FED was working hard and this is long-term policies, focused on changes in nominal interest rates (related to economic government "Taylor rule").
According to Reuters, China and India were the two countries that have most imported gold since December 2019, which made gold funds, hedge funds, and central banks focus on this asset.
Specifically, the Swiss announced that they had transferred 40.2 tons of gold to China, about 2.5 billion US dollars. This is the largest amount of gold ever transmitted to China in the past 14 months. Moreover, China central bank - PBoC, also wants to store about 150 tons of gold in the second quarter of 2021.
India has bought about 56.4 tons of gold in April and about 82.6 tons of gold in March. India is the second-largest client (below China) of Swiss banks in recent years.
Last but not least, the shares of gold mining companies took root to climb up significantly in the first quarter. Barrick Gold Corporation (NYSE: GOLD) grew 32%, from $18.67 to $24.7 per share. Kirkland Lake Gold Ltd. grew 26% from Feb 2021. It means those investors are keeping an eye on the stocks of gold companies.
Lastly, the gold ETF significantly collected more gold, specifically huge SPDR Gold. On 27th May, this ETF fund held about 1,044 tons.
In conclusion, not only central banks but also ETF funds are taking root for a significant bullish trend this time. Moreover, the financial overview of the USA, Australia, India, Europe, and China make a real theory that inflation is coming back to the economy.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.