Marex Spectron Bullion Thoughts

Gold continues to frustrate those that insist on trading it on technical and momentum , but delights those who trade the ranges and follow the dollar. The former are a stubborn bunch and it is quite remarkable the amount of times the market gets itself short on the lows and long on the highs. This has happened again and with the range I talked about a while back of 1310-1360 staying relatively intact, the buying opportunities were there last week. Few people took them and this has contributed to the quick bounce back we have seen in the last couple of days.

However, as I never stop saying ( I do hope I will be able to one day!), it is still all about the dollar. In particular dollar yen, which gold continues to mirror image in an uncanny fashion. Yes there is the occasional excursion with the stock market or the bond market, but gold returns to its current love, the yen, time and time again. So with that in mind, where to for dlr/yen? The market is still amazingly bearish towards it and is very short. Given that we are likely to have an interest rate rise this month and several more this year, I am not sure this is so wise. So I would say the downside on usd/jpy is limited for the moment , which should keep a lid on gold.

So continue to trade the range on gold and remember when it looks great, sell it. When it looks awful, buy it. It works more often than not!!

Incidentally I was asked by a news service if the recent rise in gold was due to safe haven buying ahead of the “looming trade wars”. Their words not mine. My answer was no, read the above!