Is gold no longer a safe haven?

Ole Hansen
Head of Commodity Strategy
Summary: Potential gold investors are being left frustrated and sidelined by the yellow metal's lack of momentum despite an escalating trade war, heightened concern about stability in the Middle East, recent stock market gyrations and the decline of bond yields towards an 18-month low.
According to the latest Commitments of Traders report from the US, CFTC hedge funds bought 46,201 lots during the week to May 14. Having bought another 42,000 lots the previous two weeks the market was once again left vulnerable to any short-term changes in the technical and/or fundamental outlook.
Speculators’ gold positions have been yo-yoing between long and short during the past six weeks. Bullion-backed ETF flows meanwhile have predominantly been negative since February.
Gold’s lack of momentum despite an escalating trade war, raised concerns about stability in the Middle East, recent stock market gyrations and bond yields near an 18-month low have left potential investors frustrated and sidelined. Last week’s failed attempt only strengthened this hesitancy and while we see no fundamental reason to sell gold the short term direction is likely to be dictated by the potential need from longs to reduce exposure further.
For additional background, check out this article in ZeroHedge quoting Saxo's John Hardy and Christopher Dembik.
Gold’s retracement from $1,300/oz coincided with XAUCNH finding resistance at 9,000.
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