Historically, gold has rallied when the Fed lowers rates because such moves depress yields and the U.S. dollar. Gold is also used by investors as a safe haven to trade amid geopolitical tensions. At the moment gold represents a rally of more than 35% since it broke below $1,100 per ounce in late 2015. Investors are betting the Fed will cut interest rates at its July 30-31 policy meeting. Market expectations for a 25 basis-point cut are at 58.9%, according to the Group’s FedWatch tool. Expectations for a 50 basis-point decrease are at 41.1%. In Europe, manufacturing activity contracted last month, according to data from IHS Markit. Manufacturing activity in the region was hit by a “challenging economic environment” amid trade tensions and the “political uncertainties.”
We can't argue with Ray
-Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, thinks it might be time to favor the yellow metal overstocks, saying central banks are about to spark a “paradigm shift” in investing with this round of monetary easing.
However you need to keep in mind that at the current levels gold is filling all the requirement for being in the overbought territory hence we believe our current short position in the yellow metal is still justified from the risk and reward perspective,despite our current short position in the yellow metal we still encourage you to buy the precious metals especially silver (The most undervalued metal in the history of finance which no one is looking at) for the long term as it may add enormous gains in your portfolio.
Please, the note-Our silver position has automatically been closed due to price reaching its stop level.
*US manufacturing activity last month fell to its lowest level in nearly three years.
*JPMorgan’s Global Manufacturing PMI just plunged to the lowest level.
*The U.S. economy has officially entered the longest expansion in its history.
*Gold-Silver ratio is currently trading at its 30 year high which stands at 93.