The gold market may have found a second leg

July 6, 2024 2:27 am

The long-term, secular case for gold is that Russia, China, India and the Middle East are buying in increasing amounts. However the gold rally stalled after data revealed that Chinese official gold buying paused in May. There’s also some thing of a mania around gold in Chinese retail circles that argues for caution.

However the gold market could be getting a second leg — at least a short-term one — due to political and economic uncertainty. I don’t need to recap the political side with the French election due on Sunday and huge uncertainty in the US. That’s unfolding at the same time as US economic data has taken a turn lower, raising fresh questions about whether this will be a hard or soft landing, along with more rate cuts.

That has left the gold chart looking like this:

gold daily

I spoke with Kitco on Wednesday about the outlook for gold.

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