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(Kitco News) – Despite gold ‘Last week’s dramatic sales, the precious metals market is still booming, according to one market analyst.
In a telephone interview with Kitco News, George Gero, CEO of RBC Wealth Management, said this last week ‘s selloff made a necessary reset for the precious metal that was on an unsustainable rally.
“The gold market has shaken off some of the hot money and now investors are paying attention, ”he said. “Gold still has everything for him. ”
Gero ‘Comments come as gold prices hit within a $ 2,000-per-ounce lease. December gold futures traded last at $ 1,992.40 an ounce, up more than 2% on the day.
Gero added that while last week ‘The sale was intense, it did not ‘t changed the general sentiment in the market. He added that the selloff was technical because investors in gold-backed exchange products took profits after prices pushed above $ 2,000 an ounce.
“ETFs are a double-edged sword, ”he said. “Investors sold their ETFs and market makers had to sell the physical in the forward month, which is October. But October has no volume and that caused the sharp sales. “
Although October is the first month in the gold market, December has the most trading activity. Gero said investors will be trading contracts in December to prevent potential volatility surrounding the November presidential election.
““When we look at all the technical factors, there are still fundamental reasons for investors to hold on to gold and go up for prices,” he said.
Gero said he will remain Bullish on gold as the U.S. dollar continues to struggle to find treaty, even as bonds hold near a one-month high.
“The US dollar [index] tomorrow below 93 points and that signals a greater movement on the horizon, “
The US dollar index traded last at 92.8 points, down 0.25% on the day.
Along with a weak US dollar, Gero said he expects stimulus measures from central banks to weigh on real US bond yields, another positive factor for the gold market.
“Now is not the time to bet on gold, ”he said.
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