The gold market is holding its uptrend pattern in the 1,700 range, and it may stay that way for most of the year, as investors have yet to fully understand the impact central banks and government actions around the world will have on financial markets and inflation.
From a gold investment perspective, it is not what is happening today, tomorrow, next week or next month, it is what is out 6 to 12 months and beyond.
“We have right now a stalemate because there are some negative factors, but I think they will fade before the positive factors do,” says Ole Hansen, Head of commodity strategy at Saxo Bank.
The threat of a global depression and 30 bbl Crude Oil prices will keep inflation pressures under control, which could limit gold prices in the near-term, Mr. Hansen said. He added that gold’s future looks exceptionally bright in the long-term as inflation fears pick up as a result of the massive amount of central bank liquidity that has flooded markets within the last month.
That money has been called ‘The Miracle-Grow” for gold.
Wednesday, Gold futures settled up 50.50 (+3.0%) at 1,738.30 oz, its highest mark in a week, extending opening gains which were tied to morning weakness in USDs.
Mr. Hansen noted that he sees gold prices pushing to 1,800 oz by the end of this year, hitting a new record high by Y 2021 and sees a long-term gold price above 4,000 oz.
“If ever there was a time where it made sense to put a part of your savings into something tangible, then I think that is now,” he said. “The repercussions of what we are going through right now with the coronavirus pandemic and the aftermath is going to be something that’s going to be felt for at least a generation and potentially beyond.”
Have a health day, Keep the Faith!