On Monday, our Morning Call highlighted two breakout candidates in metals
. Since then, both gold and copper have rallied higher to reach their next levels of resistance. What were the catalysts behind the latest moves higher? Gold
After almost reaching $1,350/oz, gold has since run into some mild profit taking following yesterday’s Federal Open Market Committee minutes. While the FOMC members see 2019 marking the end of their balance sheet run-off, they did not signal an end to rate rises. The market, however, did not buy into this signal with CME’s FedWatch tool
showing an 85.3% chance of no change this year.
The image below highlights the key drivers for gold and their recent impact. While the December rally was driven by support from movements across most other asset classes, the rally so far this year has continued despite headwinds from the risk rallies in developed and emerging market stocks as well as high yield corporates.
The dollar has provided limited direction with the exception of the stronger yuan. Our next commodity webinar discussing current developments and the outlook for metals, energy and agriculture will be held on February 27. You can sign up here