Market Comments:

Gold appreciated more than 7% in May: what was the real factor behind this appreciation? The financial press invokes “inflation risks” and “yield” as key drivers.


Gold headed for the biggest monthly advance since July, with inflation risks in focus ahead of key U.S. jobs data due later this week that will offer clues on the economic recovery.” (Bloomberg 31/05/2021)

They are important fundamental factors, but clearly not the only ones at play. For the last few months, same reasons have been mentioned to explain the rally of [Bitcoin]; BTC/USD was down -36.4% during the same month. A competition between Bitcoin and Gold has been picked up by our knowledge graph and the key connector between the two is the concept of “[Focal Point Commodities]”.

Following the notion of “focal (Schelling) point” in Game Theory, a “focal point commodity” is not a simple commodity or store of value, but rather something that other people value as well; hence it rises in value as the focal point becomes stronger. In this “coordination game” the new equilibrium seems to have shifted, at least temporarily, towards Gold.

Despite terrible [outbreaks], many major [emerging economies] have contracted by less than many economists had initially anticipated. So far, EM markets have been agile in responding to the [economic impact] of the pandemic with unprecedented [stimulus packages] for the sectors worst affected by Covid19.

The emerging market universe is diverse and defies a uniform narrative. Amongst all EM economies, India’s resilience has been particularly visible, with the world’s fastest [pace of growth] among major economies this year. According to the median of 12 estimates compiled by Bloomberg News, the economy is on track to grow 10% in the year that began in April.

SZ-NLP sourcing engine suggested [India Equity] as the [exports] jumped 80% the first week of May and the Ministry of Commerce & Industry reported the highest ever inflow of [FDI] for the financial year 2020-21; demonstrating the country’s favourable investment environment and growth opportunities accelerated by [pro-business reforms].