A strengthening dollar and the rally in equities is spoiling the party for gold bulls. Gold futures tumbled to the lowest in almost eight weeks after the Trump administration partially refuted a report that it would target Chinese capital market. Speculation is mounting that Washington issued the statement to encourage Beijing to move closer to signing a deal with Washington, a strategist at R.J. O’Brien & Associates said.
Monday’s slump trimmed the precious metal’s fourth straight quarterly gain, the longest winning streak in eight years. Bulls are retreating after taking their net-long position in gold to the highest in government data going back to 2006.
The strength in the greenback “is the biggest headwind for gold right now,” Phil Streible of RJO said by phone from Chicago.
The point I find most interesting about the move we are seeing in gold is how similar it is in magnitude to what occurred in the early 2000s. The initial spike occurred in 1999 but it took about two and half years for the price to breakout to new highs. It subsequently rallied 18% from the breakout point and retraced the whole move, to test the upper side of the base, before trending higher in an impressive manner for the next nine years.Click HERE to subscribe to Fuller Treacy Money Back to top