Is Gold an Unshakable Asset Immune to External Factors?
Gold continues to trade like a buoy in water, almost immune to all external factors. Currently, the precious metal is attempting to break through some major resistance levels. So far, gold has not closed at these highs or higher levels. It is noteworthy that it continues to climb perfectly on the 21-day moving average (the 50-day moving average is about 100 dollars lower than the current price).
Gold's Trend Line:
Since this summer, gold has established a perfect trend channel. If it closes slightly higher, it could quickly break through the psychological price of $2,700.
The Relationship Between Gold and Interest Rates:
Even as the 10-year U.S. Treasury yield rises from 3.65% to 4.1%, gold remains relatively strong. How would gold react if the yield falls below 4% again? The chart shows a comparison between gold and the 10-year U.S. Treasury yield (inverted).
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Gold and the U.S. Dollar:
Despite the significant rise in the U.S. dollar over the past few weeks, gold has remained strong. A similar situation was seen earlier this year when gold refused to react to the strength of the dollar, and then rose sharply when the dollar retreated.Gold Volatility:
Due to gold's "natural" hedging logic, gold volatility often accompanies price increases. Typically, when gold experiences significant price surges, volatility also rises sharply. However, this phenomenon has not been observed in the recent uptrend. Betting on further increases in gold through options trading is an attractive option.
Oil and Gold Tail Risks:
The upward tail risk for oil has increased significantly, while gold remains relatively calm.
Gold as an Asset:
At present, the ratio of gold holdings to the fund's asset management scale is still not overly optimistic.Diversification Tools:
UBS notes: "In an environment where the Federal Reserve and other central banks begin to ease monetary policy, investors still have a significant interest in using gold as a diversification tool for their portfolios. As the Fed's easing cycle unfolds, we expect investors to start increasing their gold positions, as the cost of holding decreases. Although the strength of gold this year has partly reflected market expectations of Fed easing, we anticipate that the gold market will maintain an upward trend as the cycle of rate cuts continues. Historically, gold has shown gains in the three quarters following the Fed's first rate cut."