Intermarket Analysis: Gold & other commodities market is inversely related- Newscape Capital Group

Charlie Morris, Head of Multi-Asset at Newscape Capital Group explains the inverse correlation between gold and other commodities – base metals, soft commodities. He is joined by Alessio Rastani from Leadingtrader.com and Tip TV’s Zak Mir.

Key points

Gold could fall back into discount on steepening of the yield curve across advanced world

Real rates are likely to rise given the rise in bond yields would be faster than inflation

Gold sell-off would be a buying opportunity in Nickel, Aluminium, Soft commodities – Coffee, Cotton

Pre-2008 gold traded at a discount…post 2008 it has been trading in premium and rightfully so given the uncertainty in the markets

The recent drop in gold was due to rise in Fed rate hike bets and due to the fact that Brexit uncertainty is out of the way.