The recent narrative has been a tough headwind for gold as bonds continued their sell-off in the first two weeks of August. Expectations of higher rates needed for longer needed to deal with stickier inflation have been the driver. With US core inflation still twice the Fed’s target investors are pondering the prospects of rates remaining restrictive for some time.
This narrative is the main cause of what’s been driving gold lower. However, gold has now found some major support. Furthermore, if the US economy starts to show acerbating signs of slowing down the bid could come back into bonds and that could once again assist gold higher, especially if the market starts to sense the prospect of a Fed cut next year. Seasonally, gold has a strong period in the second half of August attributed to physical demand. Over the last 15 years, gold has risen 73% of the time between August 16 and September 02.
Will gold find buyers now from key technical support and its strong seasonal pattern?
Major Trade Risks: The main risk here to be aware of is a continuation of the ‘higher rates for longer’ narrative from the US. A further rise in yields and the USD will be a headwind for gold that can send gold prices still lower.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
