Global Stock Markets
Gold’s recent rally may pause for breath but higher prices
look likely in the longer-term if US recessionary fears continue to
build.
The US Treasury 2-year/10-year yield spread may narrow further but strong chart support will limit the move.
A weak US Dollar and increased worries that narrowing US Treasury yields spreads are pointing to a recession has seen spot gold gain around $120/oz since mid-December 2017. Gold is a traditional hedge used by investors when fears of a recession grow. On the weekly chart a break above the June 2016 double-top at $1,375/oz leaves the March 2014 high at $1,394/oz easily within reach, but the market may need to consolidate recent gains before it moves higher.
Inflation expectations in the US are also on the rise after recent hard data showed price pressures building, while the recent announcement of tax cuts and increased infrastructure spending also fueled fears of further price pressures. The market has priced in three 0.25% Fed rate hikes in 2018, yet despite this the path of least resistance for the greenback remains lower.
A weak US Dollar and increased worries that narrowing US Treasury yields spreads are pointing to a recession has seen spot gold gain around $120/oz since mid-December 2017. Gold is a traditional hedge used by investors when fears of a recession grow. On the weekly chart a break above the June 2016 double-top at $1,375/oz leaves the March 2014 high at $1,394/oz easily within reach, but the market may need to consolidate recent gains before it moves higher.
Inflation expectations in the US are also on the rise after recent hard data showed price pressures building, while the recent announcement of tax cuts and increased infrastructure spending also fueled fears of further price pressures. The market has priced in three 0.25% Fed rate hikes in 2018, yet despite this the path of least resistance for the greenback remains lower.
IG Client Sentiment data show63.9% of traders are net-long Spot Gold with the ratio of traders long to short at 1.77 to 1. The number of traders net-long is 8.8% higher than yesterday and 8.3% higher from last week, while the number of traders net-short is 2.5% higher than yesterday and 6.1% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.
The US Treasury 2-year/10-year yield spread may narrow further but strong chart support will limit the move.
A weak US Dollar and increased worries that narrowing US Treasury yields spreads are pointing to a recession has seen spot gold gain around $120/oz since mid-December 2017. Gold is a traditional hedge used by investors when fears of a recession grow. On the weekly chart a break above the June 2016 double-top at $1,375/oz leaves the March 2014 high at $1,394/oz easily within reach, but the market may need to consolidate recent gains before it moves higher.
Inflation expectations in the US are also on the rise after recent hard data showed price pressures building, while the recent announcement of tax cuts and increased infrastructure spending also fueled fears of further price pressures. The market has priced in three 0.25% Fed rate hikes in 2018, yet despite this the path of least resistance for the greenback remains lower.
A weak US Dollar and increased worries that narrowing US Treasury yields spreads are pointing to a recession has seen spot gold gain around $120/oz since mid-December 2017. Gold is a traditional hedge used by investors when fears of a recession grow. On the weekly chart a break above the June 2016 double-top at $1,375/oz leaves the March 2014 high at $1,394/oz easily within reach, but the market may need to consolidate recent gains before it moves higher.
Inflation expectations in the US are also on the rise after recent hard data showed price pressures building, while the recent announcement of tax cuts and increased infrastructure spending also fueled fears of further price pressures. The market has priced in three 0.25% Fed rate hikes in 2018, yet despite this the path of least resistance for the greenback remains lower.
IG Client Sentiment data show63.9% of traders are net-long Spot Gold with the ratio of traders long to short at 1.77 to 1. The number of traders net-long is 8.8% higher than yesterday and 8.3% higher from last week, while the number of traders net-short is 2.5% higher than yesterday and 6.1% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.
No comments:
Post a Comment