Gold, Safe Havens and the return of the G-10 USD carry?

Stephen Innes SPI Asset Management

Gold's drop has been in tandem with the other risk-off currencies like CHF and JPY against the USD.

Traders are starting to position for the long USD carry trade that is expected to return in fashion as the chance of a 50bp Fed cut has all but evaporated.

The market has been using upticks in Gold prices to get short today, positioning for a test of $1380 on the less dovish outcome post FOMC minutes.

Most certainly a break of $1380 could send longs packing opening a deeper correction to $1350, but traders are biding time waiting for Wednesday's FOMC minutes before stepping in the USD accelerator and selling Gold more aggressively.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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