(Kitco News) – Increased gold costs are right here to remain as buyers embrace the treasured steel in a brand new period of low rates of interest and market uncertainty, in keeping with one market strategist.
Though investor optimism has improved as recession fears have abated in the previous couple of months of 2019, Steve Dunn, head of exchange-traded merchandise at Aberdeen Customary Investments, mentioned that there’s nonetheless sturdy elementary help to push gold costs greater in 2020.
In an interview with Kitco Information, Dunn mentioned that gold costs may push as excessive as $1,700 an oz. by the top of subsequent yr as there’s nonetheless sufficient geopolitical uncertainty for gold to proceed appeal to safe-haven demand.
“With equities at file highs, many buyers are beginning to query how lengthy this bull run will final,” he mentioned. “We’re undoubtedly seeing extra urge for food for gold as an insurance coverage goal.”
2019 was an unprecedented yr for Aberdeen Customary Investments as its exchange-traded-product (NYSE: SGOL) noticed inflows valued at $95 million.
Not solely do buyers face continued monetary market uncertainty, however Dunn famous that as a result of rates of interest are so low, they don ’t provide the identical degree of safety in comparison with earlier years.
“The basics are in place for greater gold costs in 2020. All it wants is a spark to ignite the brand new rally,” he mentioned.
Though commerce tensions between the U.S. and China have eased, Dunn mentioned that this can nonetheless be an ongoing concern in 2020. He added that the section one settlement not too long ago proposed is “underwhelming.”
As for potential headwinds for gold, Dunn mentioned that the shortage of inflation may weigh on the valuable steel subsequent yr.
“Proper now, we’re seeing pockets of inflation however for those who have a look at the economic system as a complete, you should have a tough time making an argument that inflation is on the market,” he mentioned. “For gold, if worth are going to be sustainable at $1,700 or $1,800, then you’re going to have to see persistent inflation.”
Whereas Dunn is bullish on gold, there’s one other treasured steel that he’s maintaining a tally of: silver.
“When at valuations within the treasured metals area, I feel it is advisable to take note of silver,” he mentioned. “If we don ’t see a recession in 2020 then I feel silver costs may push greater on renewed industrial demand.”
Dunn mentioned that he sees silver costs pushing to $18 to $18.50 an ounce by the top of 2020.
different treasured metals, Dunn mentioned that palladium continues to look good because the market faces rising demand and shrinking provide.
Disclaimer: The views expressed on this article are these of the writer and will not mirror these of Kitco Metals Inc. The writer has made each effort to make sure accuracy of knowledge offered; nonetheless, neither Kitco Metals Inc. nor the writer can assure such accuracy. This text is strictly for informational functions solely. It isn’t a solicitation to make any alternate in commodities, securities or different monetary devices. Kitco Metals Inc. and the writer of this text don’t settle for culpability for losses and/ or damages arising from the usage of this publication.
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