(Kitco News) – Gold’s surprising rally to new all-time highs has even seasoned industry professionals scratching their heads as to the true cause.
“It is clear that despite the West’s disaffection for gold […] demand in China is more than offsetting the shortfall, with monumental volumes flowing from West to the East,” wrote Metals Daily CEO Ross Norman in a LinkedIn post. “As such, this rally seems to have caught Western experts and forecasters by surprise – a stealth rally if you like – which suggests to me the buying is beyond the immediate purview of most of us.”
Norman said the “conventional explanation” is that gold is rallying ahead of an expected rate cut at the June Fed meeting, which would weaken the dollar and strengthen gold, “but the dollar is actually up YTD and silver is not validating the move higher in the complex as evidenced by a decline in the gold/silver ratio as we would have expected.”
Another possible explanation would be the decline in U.S. treasury yields, “down 1.2% in the last month and with gold up nearly 6% … but again no evidence that institutions are behind this as ETF demand remains lacklustre.”
For the rest of this article: https://www.kitco.com/news/article/2024-03-06/golds-shock-rally-has-analysts-grasping-explanations