The Hacked AP Tweet That Crashed The Market Revealed A 'New Reality For Gold'
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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:
On Tuesday around 1:08pm a hacked tweet from a well-followed news agency appeared suggesting explosions White House. Markets across the board spiked down and recovered quickly as the tweet was confirmed hacked – well nearly across the board. Gold was a notable exception (see Figure 1 on page 2).
While equity fell around a percent 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 stabilize around 1300 (just about 10% below today’s level).
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