Thread by @JReade_WGC

Gold: It’s been a tough few months for #gold since the middle of the year, but the past three weeks have seen signs of a recovery.

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Gold: And this recovery in #gold is even more pronounced in currencies other than the US dollar.

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Gold: This makes it an unusual rally in gold, as it is moving in the opposite direction to the US dollar - mind another gap, perhaps.

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Gold is also shrugging off the recent rise in real US interest rates, somewhat uncharacteristically, opening up the 'gap' I tweeted about recently

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Gold: So, two ‘gaps’ are opening on charts – #gold against the US dollar and #gold against US real rates.

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Gold: The sell-off in US equity markets is playing a role in attracting interest towards #gold, as the move lower in the S&P500 becomes more pronounced.

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#Gold: And volatility has picked up across many asset classes, not just in equities – although the VIX move is clearly the stand-out.

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Gold: Short-covering on Comex has been partly responsible for the move, although looking at the #gold COT report and changes in Comex open interest, it suggests that only limited short-covering has occurred so far.

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#Gold: holdings in exchange traded funds, which have fallen over the past few months, are also positive for October to date and look set to report the first increase since May 18.

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In October, #Gold has demonstrated its worth as a portfolio diversifier and source of returns during periods of turmoil. Gold is finely balanced here – possible short covering vs. closing the two gaps should equity mkts stabilise and recover.

10/10 Ends

@threadreaderapp Good morning, please unroll. Thanks!