GreatlyBlessed: Gold jumps to fresh high, now at levels not seen since August 2013
Gold surged to its highest level in nearly six years on Monday as the prospects of lower Federal Reserve rates and lingering geopolitical tensions between the U.S. and Iran made the precious metal more attractive to traders.
Gold futures for August delivery traded as high as $1,417.70 per ounce, highest mark since reaching $1,418.60 on Aug. 29, 2013. The precious metal traded more than 1% higher as of 11:30 a.m. ET.
“The geopolitical tensions and an expectation of a more dovish Fed pushed investors to increase their gold exposure,” Mark Keenan, global commodities specialist at Societe Generale, said in a note.“Gold continues to be extremely overbought with short positions staying at their yearly lows and long positions climbing to their highest level since February 2018.”
“This extreme positioning is likely to linger as [Fed Chair] Jerome Powell reassured markets about the Fed’s capacity and willingness to support economic expansion with rate cuts and other unconventional management tools,” Keenan said.
The precious metal is up more than 9% for the year and is on track for its biggest one-year gain since 2017, when it rose 13.7%.
CharlieOK: Just saw where DRecaps picked up on KTFA’s observation of UN rates. Looked at the UN currency site. Link
Looks like the international rates will come out 6/27 but not be effective until 6/30. Hmmmm.
Could this be the first basket? International rates will come out 12/27 but not be effective until 12/31. Could this be the second basket?
Is this a coincidence? UN rates out and education minister named.
Greatly Blessed: Anti-dollar trade makes outlook for gold much more bullish
The U.S. dollar could be at a key turning point, heading into a period of weakness, as interest rates fall and
U.S. growth is no longer as strong, currency strategists said.
Gold is the quintessential ‘anti-dollar’ trade, and the metal’s price has recently snapped out of a range it’s been stuck in, trading at a near six year high.
Bitcoin broke back above $11,000 to the dollar over the weekend, as some investors look to it as an alternative, during a period of a weakening dollar.
The strong dollar story could be over for now, and that’s putting a shine on gold and other ‘anti-dollar’ trades.
“I’ve been bullish the dollar, but I think the bigger, long-term dollar rally is over,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “One reason is the policy mix in the U.S. has shifted. We had tighter monetary and looser fiscal policy. That’s good for a currency, and now we have the opposite. The interest rate differentials have been moving against the U.S. U.S. interest rates have been moving faster than everybody else’s.”
The Federal Reserve’s has shifted over the past six months, from a hawkish stance of raising interest rates, to neutral, and now to so dovish it is expected to cut interest rates next month.
That has changed sentiment on the dollar, and strategists now see the potential for a longer term weakening of the currency.
The dollar also has been lagging. Since Tuesday afternoon, when the Fed was in the midst of its two-day meeting, the dollar index has lost 1.6%. But at the same time, gold futures for August in the past five sessions have gained 5.6% and gold has broken through a key area of resistance.
Analysts said bitcoin was also benefitting from the weak dollar, and it was up 2% Monday.
“There’s a a lot more interest in gold on a widespread basis. It’s not just tactical investors or ETF holders. it’s broad based,” said Suki Cooper, precious metals analyst at Standard Chartered Bank. “If we look at ETF flows, Friday we had the largest inflow since 2016.”
Cooper said at 32.1 tons, it was the largest inflow into the physically backed gold ETFs since July, 2016, right after the U.K. ‘Brexit’ vote. Gold futures were trading at $1,418 per troy ounce, just below a resistance level of $1,425 and the highest level since August, 2013. Cooper expects a high of $1,440 for the year.
Tishwash: interesting timing
Iraq-Kuwait Agreement on Border Control
The Iraqi Border Command, along with Kuwait’s State Border Security Directorate, signed an agreement on Monday to control the border and exchange information.
The command said in a statement received by the ‘orbit’ copy of it that ‘was held at the headquarters of the borders of the fourth area of the fifth periodic meeting between the leadership and the General Directorate of Border Security of the State of Kuwait, and headed the Iraqi side commander of the border area IV, Major General Salam Jawad Kazem, General of the General Directorate of Land Border Security Major General Faisal Hamad al-Issa ‘.
The statement added that the meeting dealt with all aspects of preserving the border between the two sides. A memorandum of agreement was signed between the two countries to achieve good success in controlling the border and exchanging information between the two countries. link