Gold's Price Resilience May Flag Hidden Market Risks — Market Talk

Gold's price resilience could be flagging hidden market risks, say strategists at State Street Investment Management in a note. The precious metal is down just 3%-4% from all-time highs, despite some recovery in equities since April and a decline in asset market volatility. Gold bullion prices have likely formed a new baseline above $3,000/oz, they add. Further depreciation in the U.S. dollar will likely support a gold rally to the strategists' bull scenario of $3,500/oz-$3,900/oz. Other critical macro factors for the precious metal include Fed policy and U.S. trade talks. "Risks still seem skewed towards higher-versus-lower gold prices into year-end," they say. Spot gold is 0.5% lower at $3,384.89/oz.(megan.cheah@wsj.com)