For the first time since March 2017, spot gold is trading back below $1,200 as a surge in the dollar seems to be overwhelming any potential safe-haven flows into the barbarous relic.
Bloomberg believes this is a positive sign for global contagion fears as unlike in past crises, for instance Greece – gold and the dollar are not rising together.
If the waves from Turkey’s crisis really were expected to knock over dominoes in South Africa and Mexico, as well as banks in the euro zone, the yellow metal could easily have risen alongside the dollar, as it did when Greece nearly blew up back in 2010.
Spot gold is now at its lowest level since Jan 2017…
As the dollar breaks out…
Some desk chatter is that spot gold is weakening due to Turkey dumping the reserve asset to support its currency, but there is no news to confirm that.
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Author: Tyler Durden