JPM Gold Weekly Comment
And What We are Reading
JPM’s Weekly Gold Monitor: Gold prices swiftly rebase lower as ETF outflows accelerate
(GoldFix Chart)
Gold fell sharply early last week before stabilizing in a relatively narrow range between $1,735/oz and $1,740/oz, its lowest levels in over nine months. The sharp sell-off in gold coincided with continued commodities price weakness amid a further surge higher in the US dollar.
On gold specifically, despite trading at a rich premium to underlying real yields, we have held a view that gold prices would likely be insulated from dramatic declines by investors hedging against recessionary risks and price-sensitive Asian physical demand opportunistically buying on dips. However, prices are already running ahead of our more modestly bearish 3Q22 forecast and our conviction on these more supportive catalysts is being challenged.
Point of interest: The market is setting up for a retail driven move. CTAs are now selling GLD short. It is well beyond “outflows”
What We Are Reading
Here are some posts on various but related topics that may interest readers. Sources include:Forexlive, Bloomberg, Visual Capitalist, CSPAN etc All access.
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