Gold is vulnerable: Macquarie
Business Insider|
Nov 14, 2017, 09.32 AM IST
Commodity Summary MCX
| GOLD |
The US dollar has a good track record in the December quarter, rising in eight of the past 12 years. And with the US dollar index up 1.6 per cent since the end of September, it looks like it may extend that record to nine from 13 should the current trend be maintained. For assets priced in US dollars, this presents a headwind, including the spot gold price.
After rising close to 18 per cent between January and September, the gold price has come under renewed selling pressure recently, falling around 6 per cent from the high of $1,357 an ounce struck on September 8. According to analysts at Macquarie Bank, there may be further downside pressure to come, continuing the pattern seen in 2015 and 2016.
“In both 2016 and 2015, the (December quarter) went something like this. Gold sold off as the dollar rallied on the back of rising US yields as expectations firmed of a Fed tightening,” it says. “Much the same seems to be happening in 2017. If history was to continue to repeat itself then the gold price looks vulnerable.”
After rising close to 18 per cent between January and September, the gold price has come under renewed selling pressure recently, falling around 6 per cent from the high of $1,357 an ounce struck on September 8. According to analysts at Macquarie Bank, there may be further downside pressure to come, continuing the pattern seen in 2015 and 2016.
“In both 2016 and 2015, the (December quarter) went something like this. Gold sold off as the dollar rallied on the back of rising US yields as expectations firmed of a Fed tightening,” it says. “Much the same seems to be happening in 2017. If history was to continue to repeat itself then the gold price looks vulnerable.”
