The sentiment seems to be back to bullish. Gold keeps on declining and is now below $1300. North Korea tensions are still there but markets seems not to worry much on a possible escalation. The dollar has been strengthened recently, after weakening since the start of the year.
At the moment, we consider that asset pricing are more sensitive to central banks than geopolitical risks. Markets are buying the Fed balance sheet reduction and this explains the current sell-off in gold. Within the short-term, we should see the EUR/USD pair consolidating below 1.20. It is going to be very difficult to put an end to the Quantitative Easing without provoking further turmoil on the market.
We believe that current levels are good to reload gold positions. Optimism is, according to us, way too strong regarding central bank especially knowing the number of times it has disappointed over the last few years. Central banks need to guarantee price stability and we assume it is going to be very difficult. Debts are way too important. Gold is definitely selling at a discount right now.