Inflation will not moderate, it is a runaway train
Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Access both platforms from your single Saxo account.
Gold buyers return as the dollar changes direction
Ole Hansen
Head of Commodity Strategy
Summary: Gold has found its footing after last week's selloff, supported by a weaker USD.
Gold trades back above $1300/oz as it continues to recover from the near-5% correction that took it close to, but not through, key support at the $1,275/oz level last week. The bounce that kicked off last Friday following the weak US jobs report is currently being supported by a weaker dollar as another failed attempt to break higher has attracted selling interest. Additional support has come from renewed strength in US bonds in response to softer US CPI and strong demand at yesterday’s 10-year T-Note auction when the yield touched 2.6%, the lowest since early January.
Having broken back above $1,300/oz, technical traders will now be focusing on the yellow metal's ability to challenge resistance at $1,314/oz and more importantly $1,322/oz. A break above the latter could signal the end of the correction from a technical perspective and mark the beginning of a fresh attempt to challenge the $1,350/oz level.
Having broken back above $1,300/oz, technical traders will now be focusing on the yellow metal's ability to challenge resistance at $1,314/oz and more importantly $1,322/oz. A break above the latter could signal the end of the correction from a technical perspective and mark the beginning of a fresh attempt to challenge the $1,350/oz level.
Gold’s recent trading behaviour has seen funds unsuccessfully chase the market. After buying 44k lots in the run-up to the failed attempt at $1,350/oz, they then dumped 56k lots last week after gold came close to challenging key support at $1,275/oz. Last week, however, the biggest jump in short holdings since July highlighted the risk of a renewed upside squeeze. Investors in exchange traded funds backed by bullion have also returned to the market. Total holdings have started to recover following an almost continuous drop since January 31.
Latest Market Insights
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)