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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
GOLD
Gold has once again recovered some ground following the overnight sell-off. We are back to $1815, after dipping sub $1810 late in NY trading.
- Today's moves are line with broader USD weakness, with the DXY around 0.2% lower though the session, back to 105.30, from a high of +105.50.
- US yields have also seen somewhat of a reversal, with the 2yr and 10yr off around 6bps and 5bps respectively at this stage. This has likely helped the precious metal at the margin.
- This follows very sharp moves higher in recent session though. The US real 10yr jumped a further 20bps overnight to 0.89%. This time last week we were still sub 0.30%.
- The chart below plots gold versus the real US 10yr, which is inverted on the chart. Such a backdrop may see gold struggle in the near term, or at least until we have greater clarity around the Fed outlook. Note the mid-May lows in gold were just below $1790.
- Goldman's has nudged down its gold forecast for the next 3-6 months, but they still sit higher than current spot levels. The bank expects gold to be back at $2100 in 3 months’ time, $2300 in 6 months. The 12 month target of $2500 was unchanged. Emerging market gold demand is expected to rebound in H2 the bank stated.
Fig 1: Gold & US Real 10yr Yield
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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