Four straight days of gains in both gold and oil is a rare occurence and it makes me anxious about the status of the US dollar. It’s notable that the gains have come amidst US intervention in the yen and yet-another mess in the Iran strategy.
In any case, the bounce in gold hasn’t run out of steam yet. It was lower earlier but is now up $40 and at a session high of $4382. Notably, that’s just above the mid-June high, clearing the first technical hurdle in the latest rally.
To be fair, it’s a long ways to the heady days of $5500 in February but the price action so far underscores the floor at $4000. The problem for me is the 5% rally in oil prices today undermines gold and emphasizes risks of prolongued oil price gains. I don’t think that’s an accute problem until $90-95 in brent but that’s when it starts to build (spot at $87).
This article was written by Adam Button at investinglive.com.
