Macro & Volatility™
Macro & Volatility™ #6: Shhhh … a quiet gold rally
Jun 16, 2024
Explore the surprising rise of gold prices despite economic challenges, triggered by Asian central banks and low volatility. Discuss the impact of central bank actions on commodities like gold, copper, and oil amidst geopolitical risks. Analyze the influence of strong earnings on stock market performance amid market concerns.
10:27
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Quick takeaways
- Central banks accumulating gold drive the rally, defying traditional asset relationships.
- Low volatility in gold rally challenges typical market behavior, with potential transition to Wall Street-driven movement.
Deep dives
Gold Rally Analysis
Despite the traditional cross-asset relationships, the gold rally has seen unusual strength even with a strengthening dollar and high interest rates. Central banks like the Bank of China and the Bank of Poland have been key drivers of this rally, accumulating gold rather than trading it actively. The volatility of this gold rally has been remarkably low, contrary to typical market behavior where volatility increases with price rallies. As the rally progresses, there is anticipation that it may transition into a more Wall Street-driven movement.
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