From Charlie Morris – Fleet Street Letter (Great Britain) –
Gold took a turn for the worse earlier this week. As you can imagine, many headlines proved my point. I saw one that made me choke:
Gold ‘falling off cliff’ as Brexit moves fuel dollar rally
It’s true the dollar rallied – it had to as the pound fell. But do you recall that gold’s recent shift to a premium occurred because of Brexit? How can Brexit be both bullish and bearish for gold? It makes no sense at all.
All things being equal, a rise in the dollar should see gold fall an equal and opposite amount. Naturally there are other factors to consider as well, and so all things can’t be equal. Gold has been trading at a 10% to 15% premium since Brexit and this recent fall has merely seen gold drift back towards fair value.