![]() From a trading perspective there is room for the gold price to move towards the USD1,700/oz level, which would represent a considerable resistance level in our view. An increase in velocity could be inflationary in our view given the expansion of the Fed's balance sheet over the past five years. We also note the potential for further increases in US housing prices could be a powerful force in lifting the velocity of money in the US going forward, we believe that this is something that investors are debating. ![]() On the back of this data point we suspect that the market adjusted with a thought towards the read-through to the Fed, given its focus on employment in the US, certainly data of this nature bolsters the case for continued ultra-accommodative monetary policy. The dollar's weakness coincided with the release of Initial Jobless Claims which were higher than expected. Yesterday's strength in the gold market was bolstered by a weak trade-weighted US dollar. This follows a strong day for gold yesterday, as Deutsche Bank commodities analyst Xiao Fu explains in a note this morning: It's unclear what is driving the sharp move. The shiny yellow metal is now down 1.1 percent. Account icon An icon in the shape of a person's head and shoulders.
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