What moving gold?

Stephen Innes SPI Asset Management

Gold

London doesn't appear to be too caught up in the year-end gold hype wasting little time to knock the precious metal off its high horse. As I told my colleagues today from a pure macro and risk perspective, it makes little sense for gold to be trading above $1500/oz. The surging equity market, and higher gold prices seldom, if ever exist in the same chart quadrant while simultaneously moving higher. But like any other commodity, gold also trades on supply and demand factors.

This is what I think is driving gold

Gold has passed the phase one trade deal test with flying colors. So that is at minimum mildly bullish for gold.

Official sector buying should remain a regular feature in 2020 as central banks diversify reserves away from the USD. With that in mind, I think there is more to the Russia story Sovereign Wealth Fund story that meets the eye and that is Russia Central Bank demand in 2020 What's excellent about central bank buying as they are price level agnostic since their plan is to store the bars sitting in the vault doing little more than collecting dust for decades ahead and unlikely to see the light of day before +2050

Gold holdings continue to rise with SPDR ETF, the world's biggest gold-backed exchange-traded fund, rose by 2.92 tonnes to 888.85 tonnes. It needs to be hedged somewhere, so bullish for gold. So, there remains an insatiable appetite for gold into 2020

Wither thy dollar? I’m having trouble finding anyone bullish USD into 2020, and since gold prices are most closely tied to the underlying movement of the USD and real interest rates, this argument continues to resonate.

Is it too early to factor in a possible Biden or market devastating Warren presidential inauguration? Absolutely not the election tails are massive and currently cheap to own via gold.

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.

GBP/USD keeps the firm tone above 1.3600

GBP/USD clings to its daily gains, although it gives back some of them and recedes toward the 1.3630-1.3620 band on Thursday. Cable’s uptick comes despite the modest bounce in the Greenback, while investors gear up for key data releases on the UK calendar on Friday.

EUR/USD treads water near 1.1670

EUR/USD gives away all its initial gains and receded to the sub-1.1700 region. The US Dollar’s late recovery has dragged the pair lower, leaving it practically unchanged following the NA session on Thursday. In the meantime, investors gear up for the release of preliminary S&P Global Manufacturing and Services PMIs on both sides of the Atlantic on Friday.

Gold advances to fresh high since June amid renewed USD selling, fading Fed hike bets

Gold hits a fresh high since early June, around the $4,544 region, during the Asian session on Friday and looks to build on the momentum above a technically significant 200-day Simple Moving Average.

Bulls in control with Bitcoin heading toward $80,000, Ethereum $2,500, XRP $1.50

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) are extending their rallies as bullish momentum strengthens and continue to cheer the US Treasury’s decision to double its debt buyback operations. BTC has climbed nearly 20%, ETH over 25% and XRP nearly 30% so far this week.

$40 trillion debt black hole: Is a financial crisis coming?

The United States is closing in on a milestone that would have been almost unimaginable not long ago: $40 trillion in national debt. That staggering figure framed the latest episode of the Money Metals Midweek Memo, as host Mike Maharrey examined what he calls the economy’s “debt black hole” and zeroed in on a relatively obscure corner of the financial system that could become a much bigger problem: the $1.4 trillion private credit market.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.