China fears are still propelling gold demand
“Gold’s recent strength is surprising since it has taken place against the backdrop of both a rising stock market and a rising dollar index (DXY). It’s useful to remember that when the dollar is rising, gold’s currency component is simultaneously weakening. Thus, gold prices – under normal circumstances – will decline while the dollar rises. But when gold actually rises in spite of a rising DXY (below), it implies that something else is propelling gold demand. That something is none other than the ‘fear factor’ which still evidently haunts the minds of investors.”
USAGOLD note: Some interesting comparisons in Mr. Droke’s latest. . . . . .Though gold jewelry demand is reportedly dropping in China under the influence of the coronavirus, it appears to be picking up elsewhere for safe-haven investment purposes.