While the initial gains in gold are somewhat anemic, the bias is pointing up to start today. In other words, one might've expected gold to have leaped higher following aggressive tariff threats from the White House yesterday and also in the wake of the US Senate passing a bill that supports Hong Kong protesters and threatens the Chinese government.
Clearly, the Chinese government is concerned about its economy as the central bank moved to reduce its benchmark lending rate which means the Chinese have taken three aggressive moves to support their economy this week.
While there are not key scheduled data points from the US of significance today the trade will be presented with a Federal Open Market committee meeting-minutes release and if the tone of that meeting gives off any dovish vibes that should contribute to more hard-fought gains in gold later today.
It should also be noted that gold ETFs saw an inflow yesterday breaking nearly 2 weeks of outflows. On the other hand, silver ETF holdings were reduced by 145,602 ounces yesterday and that was the eighth straight day of declines!
While the gold market has not paid close attention to classic supply headlines, Tanzania overnight published a 26% jump in gold exports year to date through September.
In the end, anxiety is being thrown off by equities is not severe but is present and that along with the latest exchanges between the US and China certainly point in favor of the bull camp in gold.
From a technical perspective, the bull camp has to be cheered by the market's capacity to extend the recovery to a 7th day even if the gains have been forged on average trading volume.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
