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22 Apr 2013
Forex Flash: Gold drop expected to knock 3.5 cents off the AUD/USD - NAB
FXstreet.com (Barcelona) - As NAB analyst note: “Since the beginning of April, gold has fallen almost $200 per ounce, at one point reaching a 2 year low of $1322, before recovering to $1410. The yellow metal is now down
15% year-to-date and 26% from its 2011 peak,” the bank says, while Gold trades last at $1408 in the spot market.
“Based on a 10 year historical correlation,” they add, “the gold price drop in isolation would be expected to knock some 3.5 cents off the AUD/USD. However, the correlation has broken down in the past two years and we are not rushing to downgrade our AUD/USD forecasts,” the analysts reckon. “More immediate downside risk arises from industrial metals prices and after China signals a ‘need to sacrifice short term growth',” they conclude.
15% year-to-date and 26% from its 2011 peak,” the bank says, while Gold trades last at $1408 in the spot market.
“Based on a 10 year historical correlation,” they add, “the gold price drop in isolation would be expected to knock some 3.5 cents off the AUD/USD. However, the correlation has broken down in the past two years and we are not rushing to downgrade our AUD/USD forecasts,” the analysts reckon. “More immediate downside risk arises from industrial metals prices and after China signals a ‘need to sacrifice short term growth',” they conclude.