Gold Price Rallies As Markets Price In More Rate Cuts

New York (Aug 5)  Gold is at the highest level since May 2013 and capitalizing on low U.S Treasury yields, negative sovereign debt around the globe and a weaker U.S Dollar. Most interestingly, Gold is ignoring the weaker Chinese Yuan which is at the lowest level against the Dollar since April 2013. With the U.S and China trade war hitting arguably the worst point yet, the odds for additional Fed cuts this year are mounting and is driving strong demand for safe-haven assets. ISM Non-Manufacturing is due at 9:00 am CT.

Technicals: As we stated since last Monday, a positive finish for the metal on the week was bullish. Price action shrugged off an upbeat jobs report and finished up by nearly 2%. We continue to hold our belief from Friday that Gold is breaking out and the bulls are in the immediate-term driver’s seat above 1447-1454.4 and with a path of least resistance is to 1484.5.

By 11:14am EST spot gold was off highs but still up $4 to $1,457, while spot silver slipped 16 cents to $16.31. However, both spot platinum and palladium bounced higher.

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