As May came to an end the gold market was extending its long-term uptrend, telling us central banks continue to buy and hold.
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US Treasury futures were indicating no change in rates were expected in June, despite the May downgrade of the US sovereign debt rating during May.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily. There are a number of possible reasons for the long-term downtrend of the US dollar index, including the US' declining role on the global economic stage.
Every Friday, Kitco News runs a poll, collecting votes from both Main Street and Wall Street on what direction gold is headed the next week. I used to look at the futures market from a technical point of view, using both the short-term daily and intermediate-term weekly charts, but eventually threw them out as largely irrelevant. Gold is a safe-haven market, and with global political uncertainty being ramped up seemingly every week, central banks from around the world have been buying and holding gold. We can consider this a key fundamental, with market price reflecting where the quantity demand equals quantities available creating a market equilibrium. This simple idea is the Law of Supply and Demand, something we learned back in Econ 101.
