Gold remains firm after making a marginal new high for the move up earlier. Economists at Scotiabank analyze the yellow metal’s outlook.
Gold strength and a firm USD look a little odd; something may have to give
Prospects remain positive as investors bet on lower global interest rates, perhaps look for diversification opportunities away from elevated stocks or, in the case of central banks, continue to reduce exposure to the USD (net central bank gold purchases have grown strongly in the past two years, reports indicate).
Broadly, history suggests higher Gold prices are usually associated with a softer tone in the USD so Gold strength and a firm USD look a little odd; something may have to give.
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