Another interesting outlook from Bespoke Invest on Gold
According to Bespoke, ``While gold is at record highs in dollar terms, the commodity is still down 10% from its highs when priced in Euros and Yen. As shown in the charts, the price of gold is up considerably over the last five years, but the recent run has only been strong in dollar terms. This indicates that the strength is solely a function of a weaker dollar rather than any real pickup demand." (emphasis added)
Additional comments:
As Bespoke noted, gold's rise so far has been a 'pass through' effect from a weak dollar.
Alternatively, this means that gold has so far underperformed the Euro and the Yen.
Also, this appears to be an "interim" trend than a secular trend.
Lastly, given that this short term phenomenon has been insulated to a seeming "US dollar event" so far, this also implies that the impact from policies to collectively devalue currencies (a.k.a. global currency war) hasn't been evident yet.
Applied to asset markets, this could suggest that inflation is still on a 'sweet spot', and would thus, seem favorable for further upside moves.
According to Bespoke, ``While gold is at record highs in dollar terms, the commodity is still down 10% from its highs when priced in Euros and Yen. As shown in the charts, the price of gold is up considerably over the last five years, but the recent run has only been strong in dollar terms. This indicates that the strength is solely a function of a weaker dollar rather than any real pickup demand." (emphasis added)Additional comments:
As Bespoke noted, gold's rise so far has been a 'pass through' effect from a weak dollar.
Alternatively, this means that gold has so far underperformed the Euro and the Yen.
Also, this appears to be an "interim" trend than a secular trend.
Lastly, given that this short term phenomenon has been insulated to a seeming "US dollar event" so far, this also implies that the impact from policies to collectively devalue currencies (a.k.a. global currency war) hasn't been evident yet.
Applied to asset markets, this could suggest that inflation is still on a 'sweet spot', and would thus, seem favorable for further upside moves.
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