Please find below our Weekly Market Update for the week ending 8th November 2019.
Blue Sky Comment
Gold loses its shine!
The last 2 weeks or so have been positive for equities, which is good news for most of us. We have seen a change of emphasis as investment banks have begun to unwind safer haven positions. As a result, we have seen the price of gold fall significantly.
At the time of writing, gold appears to be heading for its biggest weekly loss in more than 2 years.
There had been a spike in the price of gold, fuelled by fears over the US/China trade conflict and a weakening of the Dollar, largely as a result of interest rates being lowered.
So, what has driven the change in sentiment? There are 3 main factors:-
• The Federal Reserve in the US appears to be pausing the reduction in interest rates.
• It appears that we are close to an initial deal on the trade conflict with a ‘tariff rollback’ expected.
• Data suggests that there are signs of stabilisation across the global economy.
This is not the green light to go all out for full on risk, more that it brought a sense of optimism that the global economy isn’t lurching towards a recession.
Bonds also suffered as investors moved towards risk oriented assets.