by Chris Becker
We’ve seen Bitcoin crater in recent days, but the true fallout from the G20 trade war truce maybe the real Minsky Metal – gold.
Yesterday saw the biggest one day fall in over a year, nearly 2% to $1384USD an ounce after recently hitting a six year high before the summit, with a stronger USD following the lifting of tariff threats by Trump:
This was after a $100 plus rally that broke through a series of weekly highs stretching back to 2016, where speculators got ahead of themselves and tried to bid the shiny metal up to the multi-year downtrend line (upper right on the chart above).
Interestingly, the price move wasn’t just a technical overbought reversion, as the biggest center for demand also saw real price falls, via Livemint:
The key element here is monetary stability. Going into this week’s non-farm payroll (US unemployment) which will set the agenda for the end of July Fed meeting, any consideration of further QE will play into gold’s hands as the business cycle starts its inevitable end. This means a reversal for USD and hence the shadow greenback will shine again.
Of course, for Australian dollar holders, gold continues to shine and is probably still the better bet than shorting the Aussie dollar proper: