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Gold bugs keeping ‘the bid in gold alive’ — TD Securities

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Gold bugs are committing to their long-gold positions, according to TD Securities, which projects an attractive environment for the yellow metal. “Despite the lack of acknowledgement of an imminent easing cycle ahead, the market continues to comfortably call the Fed's bluff, with 60bps of cuts priced for this year and another 50bps priced for 2020, as the escalating trade war and deteriorating economic circumstances in Europe embolden the macro bears,” TD Securities strategists write. The ECB’s new easing cycle that will likely be introduced in September will be a key driver for gold, the strategists add. “With the ECB likely set to restart QE and push EU yields deeper into negative territory, U.S. rates remain relatively attractive which should continue to compress rates and keep the bid in gold alive.” Also, other geopolitical concerns, including Hong-Kong civil unrest, are boosting the case for gold. “The potential for the Hong-Kong saga to escalate is growing, which would see substantial capital outflows, and represents another factor keeping the gold bugs from exiting their bets — particularly following Beijing's clearest warning to Hong Kong protesters yet.”

By Anna Golubova of Kitco News; agolubova@kitco.com

There is more upside in gold: FXTM

Tuesday August 27, 2019 08:58

Demand for safe-haven assets will remain strong despite the market’s attempts to switch to risk-on sentiment, says FXTM. “Markets are finding any excuse to push back into risk-on territory, although such forays may be based on fleeting emotions. Given the persistent nature of the U.S.-China trade conflict, which has injected greater doses of recession fears into the markets, the overall demand for safe-haven assets is expected to remain resolute,” writes FXTM market analyst Han Tan. More upside in safe havens is possible based on the heightened tariffs that will impact the U.S. and China goods as soon as next week, the analyst adds.

By Anna Golubova of Kitco News; agolubova@kitco.com

U.S.-China trade war, ‘de-dollarization’ trend to drive gold higher long-term: SP Angel

Tuesday August 27, 2019 08:51

The long-term outlook for gold remains solid with the U.S.-China trade war and ‘de-dollarization’ trend expected to keep gold prices elevated, according to SP Angel. “Long-term uncertainty over the ongoing US-China trade war may push gold higher in the long run,” the firm’s analysts write. “A wider trend of ‘de-dollarisation’, or central banks buying into alternatives to the dollar including gold, may also strengthen gold prices.” The analysts also mention the Bank of England governor Mark Carney, who at the Jackson Hole meeting said “that the dollar’s position as the world’s reserve currency should be challenged,” SP Angel adds. 

By Anna Golubova of Kitco News; agolubova@kitco.com

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