The SX5E is still on track for its best-ever quarterly outperformance vs. the SPX, up 23% YTD in USD. Gains are broad-based, with EU stocks beating US peers by 23% since November and 24/25 industry groups outperforming since December. Europe is delivering both beta and alpha.
Net central bank purchases from 2020 to 2024 totaled 3,869 tonnes. That's the equivalent weight of 650 elephants, 2,600 Tesla Model S cars (each ~1.5 tonnes), or 26.5 million large pizzas.
What does this signal for gold’s future?
What is acutely missing from this correction is that capitulation feeling - one trading session where we really puke, and it truly feels like the world is ending. This does of course not mean that we cannot have bottomed, but it makes us a little less convinced of a sustained, strong follow-through from Friday's rally. Here are a number of observations on the theme of the missing capitulation.
Gold net specs have trimmed the long during gold's consolidation. Imagine having to explain to the boss you shaved off the big long and gold breaks up aggressively from here....
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