Comments from HSBC on gold, the euro and the European Central Bank
- USD1,300/oz beckons
- the market looks robust
- The most likely roadblock is a recovery in the USD
More, this on the EUR and ECB:
- The ECB minutes showed some concern on EUR strength
- Given these minutes are carefully constructed, the inclusion of notions of unease about EUR strength is significant
- If the EUR weakens to the USD, this could stall the gold rally
& back to the yellow rock:
- Without the obstruction of a stronger USD, gold looks like challenging USD1,300/oz
- The worry over low inflation has provided bullion with a second wind
- Geopolitical risk-off sentiment also remains, related to the recent North Korea news
- The modest build in gold-ETFs recently and the move back into the gold space of macro investors is encouraging
- USD1,300/oz is a tough resistance level, however, and may not be cracked on the first couple of attempts
