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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
- Since it reached its peak in early August 2020, momentum on gold has been bearish, with the precious metal constantly testing lower highs.
- The risk-on environment combined wit the deceleration in global liquidity have been two of the main factors explaining the consolidation in gold prices.
- The chart below shows that the annual change in global liquidity (defined as the sum of the major G4 central banks' assets) has shown a strong co-movement with gold prices in the past decade.
- Interestingly, the rise in US breakevens in recent weeks has not generated a strong rally in gold prices, raising concerns that gold may continue to test new lows in the near to medium term.
- Key support to watch on the downside stands at 1,690, which was rejected a few times this year; a break below that level would open the door for a move down to 1,600 (April 2020 lows).
- On the topside, key ST resistance to watch stands at 1,825, which represents its LT downward trending resistance line.
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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