Gold Market at T+50

Its now been 50 days since the Fed hiked rates which is probably a sensible time to take a look at what it has meant for gold.
The first observation is that the gold price is higher, although with the hike being the worst kept secret in the market, we could say that November 18th should be our starting point. That being the day that the October minutes were published with an almost cast-iron certainty that rates would rise in Dec. Either way gold closed around $1070 on both Nov 18th and Dec 16th so that makes things simple. Today gold is up at $1160 which is an 8.5% rise which is a spectacular increase, whether the time horizon is taken as 50 or 80 days. During the same period, the USD in broad terms has strengthened marginally but those gains have been given back this week.
The clever money is moving back into “risk-off” trades and whereas gold historically has been rather schizophrenic when it comes to offering itself as “risk-on commodity” or “wealth preservation asset class” it is very clearly performing the latter function at the moment. So with equities still looking shaky, expectation for further USD rate rises being dampened dramatically as other global giants err away from rate rises, gold has to get more of a boost as the dollar cheapens prices around the world.
We shouldn’t get too carried away because it has come a long way in a short space of time, but the technicals have turned and with the benefit of being able to review the fuller implication of December’s rate rise we can conclude that the gold market is in a much healthier place as many of the obstacles for buying are ebbing away.

Matthew KeenGold Market at T+50