Gold is finding its legs, even against CNY Gold is finding its legs, even against CNY Gold is finding its legs, even against CNY

Gold is finding its legs, even against CNY

Commodities 3 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  Today's Asian session saw USDCNY near the crucial 7.00 level, with the currency's positive correlation to gold now fading in light of the equities rout and the consequent safe haven bid for the yellow metal.

Today's Asian session saw the Chinese yuan touch a 10-year low at 6.9682 versus USD, thereby closing in on the key $7 level.

Gold’s weak performance was until recently tied strongly to the direction of the yuan, which has fallen by 7% so far this year. That correlation is now fading with the rout in equity markets and lower bond yields attracting a safe haven bid. This bid, combined with continued short-covering, has been strong enough to mitigate the headwind from the stronger dollar against most currencies, with JPY being the exception. 
Spot gold, USDCNH

Given gold’s relative strong performance so far this week (+0.8%) despite the stronger dollar (+0.9%) it is likely that resistance at  $1,240/oz could be challenged and broken very soon. Not least considering a potential nervous session ahead in stocks following disappointing results from Amazon and Alphabet yesterday.

Source: Saxo Bank

Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.