Gold (GC=F) soars to a record high as investors turn to the precious metal amid macro-level uncertainties. Blue Line Futures chief market strategist Phil Streible joins Seana Smith and Madison Mills on Morning Brief to break down why he expects gold to continue its rally. Streible says the key drivers sending gold higher are “the declining inflation expectations” and “the rotation of assets that tend to perform well with a more dovish Fed.” He explains, “As the inflation expectations come down and we start to see more of these interest rate cuts priced in, you’re going to see the bond market start to push higher. And we’ve seen inflation pressures. They’ve been relieved by declining energy prices. So the Fed is more focused on the fragile labor market. They’re taking more of a dovish stance. We believe that the dollar index is near some kind of peak here. And with a 54% inverse correlation to the dollar, we think that gold futures will benefit.” The upcoming US presidential election is expected to fuel market volatility, especially if the results are delayed. The strategist is less concerned about this volatility directly affecting gold but rather fueling investors to seek safety. He highlights that currency weakness is a significant driver as central banks step up precious metal spending. “It seems like geopolitical tensions are at one of the highest levels I’ve recognized in the last 20 years and I think that that’s a reason to pare back some of that currency exposure [and] hold more of those precious metals within those reserves.”
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