After the Russian demand, EM countries enter the arena
Turkish gold demand has risen 34% compared to last year’s 1st quarter. It’s not such a big fish in the global market but with other EM currencies suffering from the latest USD rise( ARS another one in the news the past 48 hrs) and higher inflation, this is where the explanation probably lies as to why gold has been doing relatively ok in the latest USD purchasing market after the Russian induced rally vs CHF due to sanctions and subsequent decline once the buying was done.
What’s going to be interesting and to monitor moving forward is whether we’ll have interventions in EM markets or not. USDTRY is 1.5% higher since the open again and USDMXN and USDZAR are both flying this week too. Note there are barriers in USDTRY at 4.25(exploded) and 4.30, but I don’t think they will mean much when the market is in black hole mode. More interesting are the ones in USDMXN at 19.30/40/50 as Ryan reported in the live room this morning, as there’s a bit more liquidity on the MXN.
For the gold traders among our readers caution may need to be had seen the expected higher correlation between EM currencies and the yellow shiny stuff in current context. Have a a look at Si’s update on the closest gold support levels on the Live blog page(home tab above) in case of interventions.
Here’s the link to the FT article on the Turkish gold moves .