If EUR/USD weakens, this could stall the gold rally - HSBC

Analysts at HSBC offer brief insight on their outlook for EUR/USD, following the recently released ECB minutes, and what it means for the latest gold rally to $ 1300 mark.

Key Points:

The ECB minutes showed some concern on EUR strength

Given these minutes are carefully constructed, the inclusion of notions of unease about EUR strength is significant

If the EUR weakens to the USD, this could stall the gold rally

Without the obstruction of a stronger USD, gold looks like challenging USD1,300/oz

The worry over low inflation has provided bullion with a second wind

Geopolitical risk-off sentiment also remains, related to the recent North Korea news

The modest build in gold-ETFs recently and the move back into the gold space of macro investors is encouraging

USD1,300/oz is a tough resistance level, however, and may not be cracked on the first couple of attempts