Gold hit a 1-month high against the greenback during yesterday’s risk-off session. But given gold’s strength is broad-based, we suspect its corrective low could be in. It’s constructive to see that gold’s breakout was broad-based and not just limited to the USD. Having created a gold basket by taking a simple average of gold versus FX majors, we note that the retracement from the 2019 highs was relatively shallow (which is a sign of strength) and yesterday’s breakout was the most bullish day for the gold basket since October. And as noted in Monday’s COT report, gold was the only metal to see an increase of net-long exposure last week, among the metals we track. From here, we’d prefer to seek bullish setups around support zones and anticipate for it to break back above $1300 and head for the 2019 highs.
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