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Will gold reach for the stars, or just hit the tree tops?



The ECB finally has a record low of minus 0.5%. And the Fed gets along with a number of other central banks, including Japan. The question is, what will gold do?

Compared to the scintillating race between May and August, gold performance in recent days has been nothing short of anemic.

Even after the European Central Bank's return to quantitative easing on Thursday, the yellow metal barely hit higher. The only consolation is that it got a giant pop early in the day, which disappeared on revenue before closing.

How High Will Gold Go; How long will these peaks last?

All this makes it difficult to predict gold's next outbreak –

; from how high it will go, to how long the run-up will last.

So to surprise the question: What will gold extensions do if the Federal Reserve cuts interest rates on September 18, as we expect, even if it's at a nominal 25 basis points?

And what if that action is followed by a rash of relief from central banks in, and, all of whom have political decisions on September 19, just a day after the Feds ??

Will gold longings reach for the stars? Or do they just want to just land on the tree tops?

Two Schools of Thought

There are two schools of thought in the direction of the world's favorite safe haven.

One is that the gold meeting has reached the point of fatigue, which means that there will be fewer of the kind of large size gains in the last four months. Although that is the case, these advancements are likely to return quickly.

The second is that precious metal longings are practically unstoppable and, if the stars match, can rewrite a record 2011 high for over $ 1,900 per ounce. [19659013] Gold Weekly Chart – Powered by TradingView "title =" Gold Weekly Chart – Powered by TradingView "/>

Gold Weekly Chart – Powered by TradingView

RBC calls for $ 1,500 Gold

Canadian banking group RBC belongs the first thought, and Thursday predicted a modest $ 1500 assumption for the rest of 2019 and 2020. The previous call was $ 1,350.

While the Fed's expected action will be the underlying driver for $ 1500 gold, RBC said the precious metal

"At this time, there appears to be pricing for the unsuccessful implementation of a US-China Free Trade Agreement before the end of the year."

It added:

"We expect a gold price seasonal meeting in December – January period. ”

Nevertheless, RBC had a more low-impact estimate for 2021 and above, and predicted an average price of $ 1,450, against previous estimates of $ 1,300. In the long run, it put down a price of $ 1,400.

RBC did not explain its restrained outlook.

After hitting 6-year highs of $ 1,565 in August, Comex holds just over $ 1500 now, accruing a 17% gain on the year against a previous high of 20%. , which reflects bullion trades, hovers at just under $ 1500, with an annual gain of 15%.

Disappointment in the Fed may prevent dividends, says TD Group

TD Securities, another Canadian financial institution, also expects the yellow metal to maintain its bullish tilt, although gold lingering disappointment over Fed cuts could prevent a competition. [19659002] The group said in a note:

The ECB's notion of QE infinity, until inflation & # 39; converges & # 39; to 2%, represents a slight slope … and will continue to see interest rates move lower But it also said that President Donald Trump's relentless pressure for the Fed to outperform its peers in the cut rates probably wouldn't see similar action. Earlier this week, Trump called officials in the the US central bank "bone heads" for its tame interest rate cuts and praised the ECB on Thursday for "acting fast" while the Fed "sits, sits and sits."

All in all, TD Securities said the underlying economic weakness, deformed the central bank's inclination, and lack of safe harbor assets when the negative debt load requirements "suggest that the path to least resistance for gold and friends is higher."

Citihgroup sees $ 2,000 gold over the next 2 years [19659005] Meanwhile, Wall Street's investment bank Citigroup (NYSE 🙂 belongs to the school of thought that expects gold to reach the stars.

Gold could hit historic highs and even break $ 2,000 an ounce in the next couple of years if the recession and interest rate cuts continue, analysts at Citi said in a Tuesday note.

The group upgraded its fourth-quarter gold target to $ 1,575 and the 2020 target to $ 1,675.

It added:

"We find it reasonable to consider an increasing likelihood that bullion markets may try again nominal price hikes 2011 to 2013 and trade at $ 1,800-2,000 per ounce by 2021 and 2022, on the back of a The US business cycle is swinging towards slower growth / recession at the top of the election uncertainty. "


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