One of the headwinds for gold has been a strong USD. However, with the recent batch of USD weakness, as positioning looks quite stretched now, could this be the time that gold’s seasonals start to shine?
Markets have been expecting the Fed to hike interest rates this year from last year and it seems that the USD has passed near term peak bullishness. If real yields start to fall again, with the USD weakness, then gold’s seasonals could really accelerate.
Over the last 14 years, gold has risen 9 times and fallen 5 times. The average return has been +3.33%.
Major Trade Risks: The main risk to this seasonal pattern would be if the USD strengthens again and real yields start to rise sharply.
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