“Gross longs are now at their highest since November 2012, while net positioning is at December 2012 highs,” adds Mazza. “The renewed interest in gold from comes as global central banks simultaneously release or maintain easy monetary policies in a fight against deflation. In addition, geopolitical instability in the euro-area stemming from the Greek anti-austerity party victory has increased the allure for the yellow metal.”
There is something to be said for global central banks sparking more upside for gold. While the Federal Reserve stopped quantitative easing several months ago and Wednesday’s FOMC minutes seemed to reaffirm a Fed rate hike is coming later this year, other central banks are moving in the opposite direction.
The Bank of Japan and the European Central Bank are committed to massive monetary stimulus programs while the Bank of Canada and several others have recently lowered interest rates.
Then there is the Swiss National Bank, which earlier this month shocked global markets by announcing it will scuttle the franc’s euro peg, an announcement that some believe will contribute to more upside for gold. [Swissie Surge Felt Across ETF Landscape]
SPDR Gold Shares
Tom Lydon’s clients own shares of GLD.