Gold weakness

Posted: July 23, 2018 in Uncategorized

Gold has been one of the worst performing sector in July what happened?

 

There are several factors at play

  • All the metal conglomerate is under pressure from the potential trade war spill over.
  • June /July are typically weak month for gold and precious metals due to the North Hemisphere summer holidays
  • US Dollar strength (now in doubt as President Trump is looking into currency manipulation – specially the Yuan dropped like a stone).
  • Temporary subdued perceived geopolitical crisis ( I say subdued as satellites show an expansion of North Korea missile program structures and the new Iranian sanctions are due on 4th November).
  • The market has been so good that gold, the classic counter trade, fell. Be wary, crowded trades never worked the last two years.

So – weakness, but not uncommon. Interestingly gold miners are at one of the cheapest level in respect to gold price.

A similar theory applies to all precious metal sector.

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