GOLD & CRUDE OIL TALKING POINTS:
- Gold prices proceed to drop regardless of inventory market turmoil
- Crude oil prices mark time, ignore EIA inventories report
- ECB coverage announcement eyed, Lagarde presser in focus
Gold costs fell for second consecutive day regardless of ongoing bloodletting throughout world monetary markets. That it misplaced floor regardless of the bellwether S&P 500 inventory sinking to the bottom degree calls into query its frequent characterization as a “protected haven” asset (which I’ve strenuously argued towards).
The steel most likely earned its “security” pedigree by the way. It affords no yield, and so tends to look comparatively extra engaging when rates of interest decline. Since this tends to occur as bond costs rise when haven-seeking capital flows enhance demand for presidency debt, it typically good points in risk-off situations.
When scope for hypothesis on ever-lower lending charges runs out, this relationship appears to interrupt down no matter whether or not market turmoil continues or not. This seems to be precisely what is happening at present: markets have already priced in Fed charges returning to 0, undermining gold’s capability for good points.
Crude oil costs edged decrease amid broader risk-off trade, however discovered little momentum to enterprise past the slender consolidation vary established because the dramatic plunge at the start of the week….