For gold bugs, and even for their lesser brethren in silver, not only is the sun shining in the summer months, but the sun is truly shining on gold as a confluence of factors helps to propel the precious metal ever higher, and one wonders when the angst laden doom mongers will appear forecasting an overbought position.
The current bullish trend for copper shows no sign of slowing just yet with the red metal touching a 3 year high largely driven by increasing demand from China(FXI, quote), along with a fall in inventories in the London warehouses.
Gold has been undermined by rising government bond yields owing to major central banks generally turning more hawkish while the still-buoyant equity markets means there has been reduced demand for the perceived safe haven asset.
The Australian dollar went sideways and a very choppy session on Thursday, finding resistance just above the 0.76 handle.
The Australian dollar exploded to the upside on Wednesday, using the 0.75 level as support.
Thanks to soft US economic data of late, expectations about an aggressive rate hiking cycle by the Fed has diminished.
The Australian dollar had an explosive session on Monday, initially gapping lower, filling the gap, and then continue the down move.
The AUDUSD pair had a very strong session on Friday, reaching towards the highs that we had touched on Thursday. That’s a very bullish sign, and I think that the market is now trying to reach towards the 0.75 level above.
The Australian dollar has rallied during the session on Monday, breaking above the 0.74 level. We found a bit of resistance at the 0.7450 level, and then dropped.
The dollar buying witnessed at the start of the week was driven by rising expectations about a June rate hike following last week’s FOMC statement and a solid US monthly jobs report.
