Syria is getting all the headlines for the $26 drop in gold prices today but I think better sentiment in emerging markets is the bigger driver. Fears of EM currency collapses were putting a bid in gold for the past month but the huge gains in developing market stocks this week shows that optimism has returned.
Gold touched a low of $1357 — the worst level since August 22 — it has entered a zone of support that includes the 50% retracement of the August rally, the mid-August lows and the late-June highs.
I’m constructive on gold because most of the good news on Syria is priced in and seasonals are good but I’m cautious about emerging markets, which are showing impressive strength.
gold daily
