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Price of Gold Fundamental Weekly Forecast – Will US-Mexico Deal, Stock Market Rally Reduce Safe-Haven Appeal?

June 10, 2019 / James Hyerczyk

Gold futures finished higher last week, reaching its highest level since February 21. If you want to believe that safe-haven buying drove prices higher then that’s your prerogative. I’m going to stick with a weaker U.S. Dollar as my reason for the strength in the dollar-denominated asset. The greenback was pressured by a plunge in U.S. Treasury yields and rising expectations of a sooner-than-expected rate cut.
Last week, August Comex gold settled at $1346.10, up $35.00 or +2.67%. Personally, trading the dollar-gold relationship makes sense because of the high correlation. The safe-haven reason is closer to emotional trading in my opinion. However, it all depends on how you look at gold. If you are consistently long stocks in your portfolio or sit in 75% to 100% long stock positions then yes, gold can be a hedge or a safe-haven asset against a decline in stock. If you are an investor or a gold speculator then you consider gold an investment. This means you have to loo...