Despite the fact that a bear case for gold is unlikely to occur, traders shouldn’t be crusing with their eyes closed and ignore the potential for a pivot in fiscal and financial insurance policies, which might drag gold costs down, mentioned Lobo Tiggre of the Impartial Speculator.
“It’s not one thing that retains me up at night time. It’s one thing value eager about,” Tiggre mentioned. “Right here’s the scary factor, [gold] might go fairly low. When you have a look at the massive correction the center of the 1970s bull market, that was on the order of 50%.”
Authorities response to COVID-19 pressured years of stimulus to be crammed into one yr, Tiggre famous.
“Gold was on its means upward anyway with out COVID-19 however the authorities response to COVID-19 introduced ahead plenty of the financial and financial coverage that we would have been searching for to happen over the subsequent few years even,” he mentioned. “When you introduced all that pro-gold financial coverage forwards, what occurs afterward? That’s the bear case. If plenty of the bull elements for gold have been introduced ahead, we might probably see gold lag for some months, perhaps even years.”
Disclaimer: The views expressed on this article are these of the creator and will not replicate these of Kitco Metals Inc. The creator has made each effort to make sure accuracy of knowledge offered; nonetheless, neither Kitco Metals Inc. nor the creator 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 creator of this text don’t settle for culpability for losses and/ or damages arising from using this publication.