• 8 hours Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 14 hours Gold Mining Stocks Stuck In Limbo
  • 1 day Executive Order Targets Huawei Over Espionage
  • 2 days Why Now May Be The Best Time Ever To Hold Gold
  • 2 days Fake News Sinks Shares In UK-Based Bank
  • 2 days De Beers To Build $468 Million Diamond Recovery Ship
  • 3 days Moody's: Turkey Faces Possible Credit Downgrade
  • 3 days Tesla's Solar Sales Are Slipping
  • 3 days Auto Industry To Get Temporary Tariff Relief
  • 3 days Welcome To The World’s Biggest Free Trade Area
  • 4 days Central Banks Are Stockpiling Gold At The Fastest Rate In Half A Decade
  • 4 days U.S.-China Impasse Threatens Rare Earth Trade
  • 4 days Wall Street Bears $1 Trillion Brunt Of Trade War
  • 4 days Mobile Sports Betting Isn’t Quite Minting Millionaires Just Yet
  • 5 days The Marijuana Industry’s Shocking Secret
  • 5 days A Generational Shift Is Quietly Unfolding In The Mining Industry
  • 5 days Pentagon To Pay $6 Billion To Help Build Border Wall
  • 5 days Beijing Backlash: Stocks Slammed, Gold Boosted
  • 6 days Market Sentiment At Its Lowest In 10 Months
  • 6 days Trader Compares Current Market Environment To 2007
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Ashraf Laidi

Ashraf Laidi

AshrafLaidi.com

Ashraf Laidi is the author of "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets" - Wiley Trading.

Contact Author

  1. Home
  2. Markets
  3. Other

Gold's Unsafe Haven and Yen's Comeback

Gold's accelerating sell-off since June 18 highlights the metal's deteriorating role as a safe haven amid Greece uncertainty as other factors take priority. Oil's 19% decline from its May highs at a time when central banks have barely begun seeing some sort of positive trend in inflation resurrects fears of deflation or prolonged disinflation.

We saw these price worries escalate back in January-February in the midst of the winter plunge in oil. And with gold seen as a hedge for inflation, any signs that disinflation or deflation returning would eliminate gold's attribute as an anti-inflation hedge.

The 34% plunge in the Shanghai Composite index over the last 3 ½ weeks and the 14% drop in the DAX-30 from its April highs, combined with the 19% drop in oil have stopped bond yields in their tracks, highlighting renewed downside risks to global growth, which is prominently reflected in falling commodities, falling yields and falling equities.

The aforementioned dynamics explain the yen's outperformance relative to all major currencies as charted against gold due to unwinding of carry trade back to the original funding currency.

We expect a surprise rate cut from Canada next week as the policy easing race seen six months ago returns. USD losses will follow as the case for a Fed rate hike is dealt another blow.

Gold % Change versus Currencies Since June 1

 

Back to homepage

Leave a comment

Leave a comment