Posted 3/15/2024, 3:01:25 PM
Gold Rallies on Rate Cut Hopes, But Gains May Be Premature
- Gold prices have rallied over 5% this month on expectations of Fed easing, but may have gotten ahead of themselves
- Macro funds switching to long gold positions has fueled the rally, not typical fundamentals
- Gold often rises after, not before, the first Fed rate cut in a cycle
- Markets now see only a 55% chance of a June rate cut, down from over 80% last week
- Barclays recommends using call option spreads to get upside exposure to gold while limiting downside