Remember that fake AP tweet sent out by hackers that caused a mini market crash for a few minutes on Tuesday afternoon?
Deutsche Bank derivatives strategist Jens Johansen and his team say the market reaction revealed a “new reality” for gold.
In a note to clients, Johansen writes:
While equity fell around a per cent and the dollar strengthened just shy of that against the yen, for example, gold barely budged. Moreover, our chart which shows prices at 1 minute increments shoe in exaggerated fashion that gold responded last. We feel this lends significant support to our commodities strategists’ view that there is a new reality for gold. Their current view is that gold ought to stabilise around 1300 (just about 10% below today’s level).
The chart below shows the reaction of gold to the fake tweet versus that of other markets.
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