Gold rallies on USD weakness
Gold is a big beneficiary as the US dollar weakens on growth worries and rising rate cut expectations after the ISM manufacturing index fell into contractionary territory for the first time in three years.
Gold gave back some gains last week in a slide to $1520 from a cycle high of $1555 but it’s now within striking distance of a new peak.
There will be an ebb and flow to the trade war and central bank easing but if you believe trade won’t improve and that central banks are in an easing cycle, then the only place for gold to go is higher. In many currencies, it’s already above the 2011 peak.
If gold can break higher here, there isn’t any obvious resistance until close to $1800. Naturally, there will be some consolidation along the way but the major breakout continues.