Forex, video, latest July 22, 2021 1:01 pm
a gold markets has been challenging to trade recently due to a stronger dollar. youre may has been puzzled why real yields were dropping lower, but gold seemed so slow to fly higher.
It was a strong USD that was clipping gold’s wings. Look at a chart below also see how gold moved rapidly higher inside May also June, but only as real yields also a USD moved lower.
Right now us can see that a drop inside real yields is not being accompanied by a falling USD, so gold is only nudging higher.
So this are a six things to watch.
- Real yields. Falling real yields is awesome for gold, also rising real yields is bad. However, look at real yields inside conjunction with a USD
- USD: a key this is watch for USD weakness. If us suddenly see USD weakness (a catalyst for it) then gold becomes a clear buy.
- Inflation. If inflation pressures quickly fade then that become mean real yields can start rising also that is a pressure for gold
- a difference between a Fed also a ECB. a ECB meet later. If they look like becoming more dovish that become weakened a EURUSD also boost a USD. It is a neutralising effect on gold. However, if a ECB surprise markets also are hawkish, then a EURUSD strength become weaken a USD also boost gold
- US Treasuries:A fast push higher inside US yields also become help push real yields higher. However, remember to not just look at US yields, but also US yields inside line with what inflation is doing
- Seasonally, gold is strong right now. Over a last 10 years gold has had an average gain of +4.43% between July 21 also August 31.
- This is on a Asian wedding season also tends to see strong physical demand. However, physical demand is likely to become low, like it was for a Chinese New year at a turn of a year. Nevertheless, if us see a catalyst for a weak USD then knowing this pattern won’t do any harm. However, alone it lacks teeth this year due to social restrictions on Corona.
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