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2025-09-12 16:39:17
[Analyst: Gold and the Euro Close in on the Dollar's Throne] ⑴ If investors continue to place their safe-haven bets on gold and the euro over the dollar, the global reserve currency's dominance may weaken. Euro- and dollar-denominated gold have surged simultaneously this year, testing their 2025 highs. ⑵ Gold has risen by over $1,000 per ounce this year, but speculative positions are well below their February peak, suggesting that long-term demand, such as central bank reserve adjustments, is driving the gains. If US interest rate cuts trigger speculators to cover their losses, the illiquid gold market could see a further gap. ⑶ Speculative forces are strong behind the euro, with traders building significant long positions after clearing short positions before April. The current $17 billion in bullish bets still has room to reach the record high of $31 billion. The decline in oil prices following increased production is also indirectly supporting the euro, suppressing the dollar, and increasing the probability of a Fed rate cut, further fueling the rally in gold and the euro.
