$XAU, $GLD, $USD
FLASH: The Fed is likely to have made at least 2 rate cuts by then So, we see a window of opportunity for gold to rally before inflation subsides in 2-H of Y 2020.
Gold extended its rally, marking the biggest monthly advance since the UK voted to leave the EU in June 2016.
Prices rose to the highest since Y 2013 on expectations for looser monetary policy, rising geopolitical tensions and slower global growth as the trade dispute between the US and China continues.
Gold posts a strong June ahead of the meeting Saturday between Presidents Trump and Xi in Japan, with investors waiting to see if the 2 nations will be able to resolve their differences.
If you look at gold not only priced in USDs, but in all fear currencies, it has broken out.
Gold’s gains gathered momentum last week after the Fed cleared the way to a US interest rate cut and other central banks also pivoted to a more Dovish stance.
Because global macro-economic headwinds are simultaneously gaining intensity, we here at HeffX-LTN expect USD to decline, further boosting demand for gold and possibly sending the metal to $1,500 oz with in the next few months, then higher, as inflation will set in,
Bonds and shares at higher levels is another factor, as are fears around trade disputes.
Gold futures for August delivery settled 0.1% higher at $1,413.70 oz at 1:31p in New York on the COMEX and gained 7.8% this month. Prices reached as high as $1,442.90 Tuesday.
Holdings in gold-backed ETFs are at the highest since Y 2013 and have mirrored gold’s price move by also gaining this month by the most in 3 years.
.DXY, a gauge of the USD Vs 6 peer currencies is down 1.6% this month, the 1st monthly decliner for the Buck since January.
The frame from the end of Y 2019 and into Y 2020 is seen as favorable for higher average gold prices as rising US inflation drives real rates even lower. As the Fed is likely to have made at least 2 rate cuts by then So, we see a window of opportunity for gold to rally before inflation subsides in 2-H of Y 2020.
Have a terrific weekend.
Latest posts by Paul Ebeling (see all)
- Wall Street’s Key Stock Analysts Research Report, All Buys - April 3, 2020
- Healthcare Stocks Alluring in Defensive Market - April 3, 2020
- Friday’s World Markets: Asia-Pacific - April 3, 2020