Editor’s Note: With so much market volatility, stay on top of the daily news! Let yourself be caught in minutes with our quick summary of today’s news and expert opinion. Sign up here!
(Kitco News) – The gold market is a runaway freight train and with all-time highs on the horizon, now is not the time to stop in front of that train, according to analysts and retail investors.
The latest weekly Kitco News gold survey shows that both Wall Street analysts and Main Street investors expect gold prices to continue to push upward even as the market sees seven weeks of consecutive gains.
Sean Lusk, co-director of trade hedging at Walsh Trading, said increasing economic uncertainty, a low interest rate environment and a weaker US dollar are creating the perfect storm for gold prices. He added that the market above $ 1,900 has reached its 23% target for the year.
“Right now, nothing is happening in the global economy that says it shouldn’t ‘It has no gold, “he said. “The market is completely overbought, but with this momentum, I think we could see prices rise another 10% more before we see significant profit taking. ”
This week, 14 Wall Street professionals participated in this week’s survey, 11, or 79%, asked for gold prices to rise. Two analysts, or 14%, predicted lower prices. Meanwhile, one analyst, or 7%, expected prices to trade sideways.
A total of 1,870 votes were cast in an online poll on Main Street. Of these, 1,334 respondents, or 72%, were looking for gold to rise in the coming week. Another 317, or 17%, said it was lower, while 219 voters, or 12%, were neutral.
Both Wall Street and Main Street expected to see a rise in gold for the current trading week and have not been disappointed. As of 11:37 am EDT on Friday, Comex August gold futures last traded at $ 1,893 an ounce, nearly 5% higher compared to the previous week.
Gold is experiencing its best weekly performance since early April as the market was recovering from the COVID-19 sell-off in late March.
Looking at the market momentum, Eugen Weinberg, head of market research at Commerzbank, said he would not be surprised if gold prices rose to $ 2,000 an ounce by the end of next week. He added that it is only a matter of time before gold reaches that level.
Although gold seems a bit overbought, Weinberg said the market is backed by solid fundamentals.
“I still wouldn’t call bubble gold,” he said. “We still have trillions and trillions of bonds with negative nominal returns and this will continue to support gold.”
Afshin Nabavi, head of trading with MKS (Switzerland) SA, also said that it is only a matter of time before gold prices hit all-time highs after exceeding $ 1,900 an ounce.
He added that, along with continued uncertainty, mounting tensions between the United States and China will continue to support gold as a safe asset.
“Everything is a mess, so investors want to have some gold for their protection,” he said.
However, not all analysts are bullish on gold. Everett Millman, precious metals expert at Gainesville Coins, warned investors that gold ‘The rally could have gone too far, too fast. He added that current levels could attract profit taking.
“I think because we recently hit these highs, the market needs to be corrected by the market, ”he said. “Unfortunately, because the recovery has been so strong and so fast, the floor for gold could be as low as $ 1,800 or less. We do not ‘I still don’t have time to consolidate. ”
Daniel Pavilonis, senior commodity broker with RJO Futures, said that while some consolidation at current levels would be healthy for gold, he said the momentum cannot be ignored.
He added that gold continues to look attractive as the United States faces critical support on an important long-term trend line. Further weakness in the US dollar will continue to support gold, he said.
“We have printed so much money and there is so much risk on the table that it is difficult to see how the US dollar recovers from current levels,” he said.
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a request to make any exchange in products, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept guilt for loss and / or damage resulting from the use of this publication.
.
