Gold struggles as ECB signals “long goodbye to QE”
Gold is struggling again this morning for the second day in a row trading at $1318.50 and down about $4.50 on the day. Silver is also down this morning at $16.47 (-13¢).
Today we learn that the ECB will put a hold on rates accompanied by a Financial Times headline that there will be a “long goodbye for QE” in the European Union. Matching that statement of intent, the Bank of Japan announced a similar course of action over last weekend. Meanwhile, the Federal Reserve has not backed off its intent to tighten policy even as many raise concerns about an “end of cycle” recession looming on the immediate horizon. All this should have sent the dollar on a tear, but it hasn’t. One wonders why. . . . .and what Mr. Market is trying to tell us.
I will round out today’s report with a bracing prediction from Standard Charter’s Suki Cooper who told CNBC earlier today that she sees gold testing five year highs by the end of the year starting after the Fed’s rate meeting in June. Gold upside, she says, would come in concert with a weakening trend in the U.S. dollar. That five year high as shown in our Chart of the Day is $1700 and, needless to say, would constitute a dramatic upside correction.
Chart of the Day