HSBC Says OPEC Deal Will Help Gold

September 29, 2016 Share Print 0

The oil-production agreement announced Wednesday by OPEC members may end up helping gold, says HSBC.

Normally, oil and gold tend to move together, although the relationship has not been pronounced lately, the bank points out. The OPEC deal to cut output was the first since 2008. “If the agreement is as important as the financial media are reporting, then we believe gold may be impacted,” HSBC says.

“Further oil price rallies may feed more convincingly into the gold market, especially if other non-oil commodities also rally, and the broader commodity indices, such as the GSCI, rise. This could help stabilize gold prices, which have clearly been on the defensive recently.”

via Kitco

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.