Gold: Safe haven role reassessed on rate repricing – BNY

FXStreet Insights Team FXStreet

BNY’s Head of Markets Macro Strategy Bob Savage reports that Gold is set for its first weekly loss in five weeks as rate expectations shift toward hikes in Europe and fewer cuts from the FOMC. A stronger Dollar and use of Gold as a liquidity source weigh on prices. Changing Oil–Gold ratios highlight evolving risk barometers around upcoming U.S. jobs data.

Losing ground as liquidity tool

"Gold prices are on track for their first loss in five weeks, as interest rate expectations shift, pricing in hikes for Europe and just one cut for the FOMC."

"The USD rally – the dollar has gained 1.7% this week, its strongest performance in over a year – reflect the rethinking of safe havens."

"Gold has also served as a liquidity tool, as investors have sold holdings to cover margin or increase cash holdings."

"The relationship of oil to gold has shifted: whereas it took nearly 80 barrels to pay for 1 oz of gold, that figure now stands at 60 barrels."

"The roles of rates, liquidity and gold as risk barometers will be back in play after the U.S. jobs report if it surprises to the upside or the downside."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with four-week highs past 1.3500

GBP/USD advances modestly at the beginning of the week, managing to surpass the key 1.3500 threshold. A modest rebound in the Greenback accompaniees Cable’s uptick amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD treads water around 1.1550

EUR/USD trades in a narrow range around 1.1550 of Monday. The pair’s inconcluisve price action comes as investors continue to assess Friday’s disappointing US jobs data in a context where renewed tensions in the Middle East lend decent support to the US Dollar.

Gold corrects from tops, holds on above $4,300

Gold recedes marginally on Monday, although it keeps the trade well above the $4,300 mark per troy ounce for now. In the meantime, the precious metal is seen closely following the Fed’s interest-rate outlook as well as developments in the Middle East.

Crypto Today: Bitcoin, Ethereum, XRP eye short-term recovery amid ETF inflows

Cryptocurrency prices are gaining traction on Monday, with Bitcoin (BTC) trading above $65,000, Ethereum (ETH) holding the near-term $1,900 support and Ripple (XRP) hovering above the critical $1.00 demand zone. The broad recovery comes amid capital inflows through US-listed Exchange-Traded Funds (ETFs).

US Payrolls miss – RBA on deck tomorrow

It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.