Are Gold Dips Worth Buying?
Are Gold Dips Worth Buying?
Gold has been pressured recently by USD gains and rising real yields. This has resulted in gold pulling back recently from recent highs and moving back towards key daily support levels.
Many analysts are expecting the case to remain bullish for gold. With US rates expected to fall, STIR markets seeing two rate cuts this year, and yields also expected to fall the dip seems attractive fundamentally. Furthermore, there is an interesting seasonal pattern to be aware of for gold.
Over the last 15 years, between July 24 and Sep 3, gold has gained 80% of the time for an average return of 3.30%. July and August tend to be strong months for gold as the Indian wedding season tends to see an uptick in physical demand. So, does this mean any deeper dips in gold are well worth looking out for?
Major Trade Risks: The biggest risk here is if the path of US rates turns more aggressive and that should support the USD and real yields higher. Also, any further USD bids can weaken gold. These would be natural headwinds for gold.
HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.
About: HYCM is the global brand name of HYCM Capital Markets (UK) Limited, HYCM (Europe) Ltd, HYCM Capital Markets (DIFC) Ltd and HYCM Limited, all individual entities under HYCM Capital Markets Group, a global corporation operating in Asia, Europe, and the Middle East.
High-Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.
20230524
