The Asymmetric Gold Trade

Entering XAU/USD longs in a much less crowded market.

Year-to-date, the weakness in XAU/USD can broadly be attributed to elevated energy prices, which have led to inflationary concerns and ultimately translated into higher yields, raising the opportunity cost of holding gold.

Yet with gold now down 20% from the January highs, and the higher-for-longer rates narrative well established, we think now could be the time to start re-adding long exposure to the precious metal.

Given the World Gold Council survey released today, it seems like we’re not the only ones taking this side of the trade.