(Kitco News) – Though the gold market is down from its almost seven-year highs hit at first of the brand new buying and selling week, one market strategist stated that the yellow steel has extra room to maneuver larger in the close to time period.
George Milling-Stanley, chief gold strategist at State Avenue International Advisors
In a phone interview with Kitco Information, George Milling-Stanley, chief gold strategist at State Avenue International Advisors, stated that gold’s rally appears to be like sustainable as the most recent Center East battle provides to the funding uncertainty surging via monetary markets.
“The rally in gold appears to be like sustainable as we simply don’t know what will occur subsequent,” he stated. “We live in a interval of unprecedented uncertainty and that’s going to proceed to assist gold costs. I feel lots of people anticipated to see a quiet begin to 2020 however that didn’t fairly occur.”
Milling-Stanley stated that the rally appears to be like strong because the rising Center East tensions are additionally boosting oil costs. He famous that in earlier skirmishes, the oil market noticed little motion. In a single day Brent crude costs pushed to its highest stage since April, rising above $70 a barrel.
“If the rally in crude oil is sustained, then the gold rally shall be sustained,” he stated. “Increased oil costs will result in larger inflation, which is optimistic for gold.”
Milling-Stanley stated that it’s too early to find out if larger oil costs will put sufficient strain on U.S. customers to create slower financial development; nevertheless, he added that he’s watching financial development carefully.
As to the place gold costs may finally go, Milling-Stanley stated that he nonetheless sees costs buying and selling in a vary between $1,550 and $1,650 for 2020. Though gold is up greater than 3.5% in the primary few buying and selling days of 2020, he stated that he doesn’t see indicators that the market is overbought.
Milling-Stanley’s feedback come as gold costs commerce effectively off their session highs however nonetheless stay in optimistic territory. February gold futures final traded at $1,564 an oz., up 0.75% on the day.
“I anticipate that gold has room to transfer larger within the close to time period,” he stated. “I’m not fearful about gold being overbought presently as I’m seeing a excessive stage of curiosity from all kinds of traders.”
Though the most recent Center East battle is entrance and middle in presently driving investor sentiment, Milling-Stanley stated that there’s sufficient international geopolitical uncertainty to maintain gold costs via 2020.
Milling-Stanley stated that the commerce struggle, even because the U.S. and China get able to signal a phase-one settlement, nonetheless hasn’t been resolved. He additionally famous that Britain’s plan to go away the European Union can also be in a state of flux.
“Not solely do we’ve got unprecedented ranges of uncertainty, however we’re nonetheless coping with extraordinarily low rates of interest. These are all optimistic catalysts for gold,” he stated.
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