Gold eyes first double-digit monthly price gain since February 2016
- Gold is on track to print double-digit monthly gains.
- The metal has rallied on the back of dollar weakness and negative real yields.
Gold is currently trading at $1,970 per ounce, representing a 10.5% gain on a month-to-date basis, having hit a record high of $1,981 on Tuesday.
If these gains are held through Friday’s NY close, the resulting double-digit monthly gain would be the first since February 2016.
The rally could be attributed to the dollar sell-off and negative yields on the US Treasury inflation-protected securities (TIPS). The dollar index fell to a 26-month low of early Friday, taking the month-to-date decline to 4.86%. Meanwhile, the 10-year real or TIPS yield fell to a record low of -0.90% earlier this week.
Looking forward, gold could continue to gain altitude as the Fed is unlikely to normalize its easy policy anytime soon and the dollar is likely to remain under pressure due to renewed concerns regarding the future course of the world’s largest economy.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
