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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.
COMMODITIES
- Last year, we saw that the significant rise in global liquidity following the Covid19 shock led to a surge in gold prices, with the precious metal peaking at $2,075 per ounce on August 7 (2020).
- Gold prices have been falling since then, constantly reaching lower highs despite rising inflationary pressures in most of the developed and emerging economies.
- Even though the uncertainty over the economic outlook remains elevated, the significantly deceleration in liquidity combined with USD strength (as Fed taper nears) could continue to weigh on gold in the near to medium term.
- Important support to watch on the downside remains at 1,690, which corresponds to the 61.8% Fibo retracement of the 1,451.55 – 2,75.47 range (2020/2021 low high). A break below that level would open the door for a move down to 1,600 (low of the LT downward trending channel).
- However, it is important to note that gold has offered investors a good hedge against periods of rising price volatility (i.e. VIX) in the past cycle; gold prices generally appreciate when equities experience sharp drawdowns.
Source: Bloomberg/MNI
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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