Gold is at a very interesting place right now. With inflation rearing its ugly head, real yields gets compressed down. Recent weakness in the Crypto world (no thanks to Elon) suggest that we may be also seeing funds flowing back into the Precious Metals complex.
When we study Gold’s weekly chart, there’s an indication that we could be seeing the start of a bigger move to come. Commitment of Traders Report (COT), which reports the buying and selling activities of commercial traders, is showing us that Commercial Traders had been increasing their bullishness in Gold. Generally, Commercial Traders are nett sellers in commodities as they are mostly doing hedging activities. But their intensity in selling varies according to market activities, thus adding support or resistance to the market they are dealing in.
KST is also showing indication that it may be crossing over upward soon. With the added support from COT report, hopefully we can see gold price appreciating further back above $2000 level.
SGX has a GLD US$ ETF which tracks the price of Gold. If you are keen to add some Gold to your portfolio, you can consider this ETF.
As usual, this writeup was broadcast to Clients on 18 May 2021 but posted here only on 20 May 2021.
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