Most of gold’s outflows are likely now done, but the precious metal will remain sensitive to any new macro data, especially employment and inflation, any new Fed speak, the U.S.
data unfolds in the lead-up to Jackson Hole, Fed speak, and where real yields and the USD trend to,” Shiels pointed out.
There are now many obstacles putting pressure on the recovery, including prospects of higher U.S.
If rates remain pinned & low and lackluster data supports a put Fed, the continued convergence of risk-on and stimulus drives outperformance in other higher beta sectors ,” Shiels wrote.
Other positive gold drivers include de-dollarization policies of many central banks around the world, which could put some pressure on the U.S.
“While the narrative now is that the Fed will commit to tapering soon, and won’t be behind the inflation curve, that becomes a lot trickier down the line, if /when any further fiscal stimulus to maintain 2021 economic outperformance into the midterms in 2022.