Gold continues to charge towards $US3,000 following President Trump’s latest trade salvo. Friday, data showed China’s central bank expanded its gold reserves for a third straight month, a bullish signal that shows China’s commitment to diversifying reserves, even at these elevated prices. Remember, in Trump’s first term, for example, the PBOC added gold for about 10 consecutive months. The PBOC joins a number of other central banks and market participants which have been adding gold to their holdings amid geopolitical and economic uncertainties, pushing the precious metal to new highs almost every month.
Gold has also enjoyed support from its typical drivers, declining real rates and the US dollar. However, with inflation jitters coming back into focus, the outlook for further Fed rate cuts has faded. Any reversal there could present more of a headwind going forward.
- We can see gold testing $US3,000, but we feel profit-taking isn’t far away.
MM remains bullish bullish gold for now
Add To Hit List
