Market Nuggets
'No Better Alternative To Gold': FXTM
Gold prices continue to show strength even despite a rebounding stock market, writes FXTM chief market strategist Hussein Sayed. “Gold prices continued to hold above $1,500 despite the slight recovery in stock markets. With more than $15 trillion in debt trading with a negative yield, there doesn’t seem to be any better alternative to gold,” says Sayed. At this point, it would be normal to see some consolidation, he points out. “Given that prices have rallied a significant 17% so far this year, expect to see some consolidation now.” But, if the market sees weaker U.S. dollar, gold is in for another great rally. “If Trump’s administration considers intervening in the U.S. dollar to bring it down, expect to see another steep rally in the yellow metal price,” Sayed states.
By Anna Golubova of Kitco News; agolubova@kitco.com
Gold Eyes Currency Wars, Chinese Data — MKS PAMP Group
Thursday August 8, 2019 09:25
Gold prices are taking their cues from the Chinese yuan Thursday morning, according to MKS PAMP Group. “Market participants attention was squarely focused on what action the PBoC was going to take with its daily Yuan fixing. Most of the market predicted it would cross the 7.00 level today, with a number of banks predicting a fix of between 7.0150-7.0200,” MKS writes. “The yuan fixed at 7.0039 (6.9996 yesterday), so it did cross the 7 line for the first time since 2008, although I think the market was expecting a much higher fix of which the preceding price action suggested … Gold plunged about $12.50 to the daily low.” Chinese trade data is helping gold to stay above the $1,500 an ounce level, adds MKS. “Chinese trade data came in better than expected - exports +3.3% YoY vs -1.0% expected (-1.3% prior), imports -5.6% vs -9.0% expected (-7.3% prior) – which gave gold some reprieve, grinding its way back to $1,500.”
By Anna Golubova of Kitco News; agolubova@kitco.com
There's Still Asymmetry In Gold Prices — TD Securities
Thursday August 8, 2019 09:25
Betting against gold is a losing strategy for this summer, writes TD Securities. “We've cautioned that standing in front of Gold's Runaway Train is a fool's game, as trading overshoots in gold as a combination of some 30 different mean-reversion signals would have been a losing strategy. While we still think that there's still some juice in this rock,” strategists at TD Securities say. The market is currently pricing in extensive easing from the Federal Reserve, which is highly supportive of stronger gold. “With global central banks and private investment holdings growing, we continue to see asymmetry particularly in gold prices, as the market calls Chair Powell's bluff to deliver ‘mid-cycle cuts’ as opposed to a full-blown easing cycle, and as the likelihood of a currency war rises.”
