Rating agency Moody's believes the situation after Brexit is not optimistic, The short-term attractiveness of gold will decline

In Daily Market Review, English
June 12, 2020

Rating agency Moody’s believes the situation after Brexit is not optimistic
Rating agency Moody’s expects that if the UK leaves the EU without a deal at the end of 2020, the size of the UK economy will be significantly lower than the current expected level. However, the impact of the epidemic on the economy may still be the main driver of UK credit risk in the coming years. As the UK’s fragile economic recovery progresses, Brexit without agreement will exacerbate the impact of the epidemic. On the other hand, Britain and Europe seem to be unwilling to compromise, and Secretary of the Cabinet Office Goff said that the possibility of extending the Brexit transition period was ruled out. At the same time, French lawmakers urged the French government to maintain a firm position on the fishery issue in the Brexit negotiations.

The short-term attractiveness of gold will decline
The expected cooling of the rapid economic recovery on Thursday and the risk of the second spread of the epidemic made US stocks plunge. However, as the US dollar has fallen by more than 3.5% in the past half month, risk aversion has caused funds to flow into the US dollar, so gold rushed back down. Some institutions believe that as the market realizes that the current risk of deflation is higher than the risk of inflation being out of control, the attractiveness of gold as a hedge against inflation will decline in a short time. However, the latest data shows that investors continue to flow into gold ETFs, and ETFs attract long-term investors, which means that the pattern of gold long-term growth has not changed.

 


Z. com Bullion is an affiliate of GMO Financial Holdings, Inc., a Japanese listed group. The risk of loss in leveraged foreign exchange trading & margin trading can be substantial. Visit the company website to read full risk warning. https://bullion.z.com/en/about/legal/risk/

場外式黃金/白銀交易的風險:
Service relating to Over-the-counter (OTC) Gold Bullion/Silver trading is provided by MOL. OTC Gold/Silver Bullion trading carries a high degree of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. OTC Gold/Silver Bullion is not regulated by the Securities and Futures Commission (""SFC"") and therefore trading OTC Gold/Silver Bullion will not be subject to rules or regulations promulgated by the SFC. Before deciding to trade OTC Gold/Silver Bullion you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain losses in excess of your deposited fund or even more in extreme circumstances and therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading OTC Gold/Silver Bullion, and seek advice from an independent financial advisor if you require.