The long-term argument for gold is that Russia, China, India and the Middle East are buying in increasing quantities. But gold’s rally has stalled after data showed official gold buying in China stopped in May. There is also a kind of gold mania in Chinese retail circles that is cause for caution.
But the gold market could see a second rally – at least in the short term – due to political and economic uncertainty. I don’t need to recap the political side with the French election on Sunday and the huge uncertainty in the US. This is happening at the same time that US economic data has been trending lower, raising new questions about whether this will be a hard or soft fall, along with further interest rate cuts.
This made the gold chart look like this:
Gold daily
I spoke with Kitco on Wednesday about the gold outlook.