The bullish momentum in gold stays unabated given the shortage of bearish catalysts. We did get a pullback ultimately of September/begin of October because the repricing within the aggressive price cuts expectations raised actual yields and weighed available on the market.
There’s a lot of folks shorting this monster at each new excessive making an attempt to catch the highest. I do not blame them as a result of positioning is certainly at file highs, however within the markets one thing costly can get much more costly if there isn’t any significant catalyst triggering a repricing.
Within the chart above, we are able to see the positioning is at file highs. We’re at ranges seen solely in 2016 and 2020. Within the greater image, gold stays in a bullish pattern as actual yields will probably proceed to
fall amid the Fed’s easing cycle. The pullbacks will probably be triggered by a
repricing in price cuts however except the Fed’s response perform adjustments, the
uptrend ought to stay intact.
One key occasion which might
set off a robust selloff in gold is the upcoming US election. In reality, a Trump
victory will probably increase actual yields on increased progress and fewer price cuts
expectations. The final time Trump bought elected, gold cratered by 16% (chart beneath).
In case Harris prevails, issues will probably stay the identical and gold will probably proceed to push into new highs with the pullbacks coming from the repricing in price cuts on robust US knowledge.