Apparent progress in ceasefire talks has put a dent in safe-haven flows. Subsequently, gold tumbled beneath the $1,900 level. The path of least resistance appears to the downside amid positive Russo-Ukraine updates, economists at TD Securities report.
Strong ETF inflows associated with safe-haven appetite
“The latest easing of tensions comes at a time when rates markets are readying for the Fed to deliver a hawkish surprise to markets while easing price momentum has brought CTA liquidation triggers within range near $1880/oz.”
“While the yield curve may be bringing back whispers of a looming recession that could re-ignite investor interest in gold, ETF flows have not historically been strongly associated with the yield curve during a hiking cycle. This suggests that the strong ETF inflows have rather been associated with safe-haven appetite, which leads to downside risks as the negotiators continue to work towards a ceasefire.”
