- preserve our 0-3m point-price goal at $2,200/ozand a 6-12m goal at $2,400/oz.
- We carry the 2021E base case gold worth forecast by ~$300/oz, versus our early July replace, to a report $2,275/oz.
- Occasional liquidation squeezes, drawdowns, and profit-taking exercise for gold appear seemingly in a excessive volatility market setting. However traders will in all probability purchase that dip on the again of an accommodative central financial institution response perform.
- Document weak gold jewellery consumption and tepid official sector gold demand might restrict the efficiency of gold
- The report tempo of inflows and total development in bullion ETF holdings displays robust investor urge for food for gold.
- Larger inclusion of gold by portfolio asset allocators, particularly nontraditional gamers (e.g., pensions, insurance coverage, household places of work), is an additional tailwind for the bullish gold thesis within the medium-term.
- Present Fed coverage and liquidity provisions have additionally tempered issues about one other sharp collapse in inflation expectations. So the general gold worth pattern ought to, on steadiness, stay upward sloping within the present regime.
All roads nonetheless result in extra financial instability and the chances are rising that will probably be one other acute episode. With the US election distracting Congress and stopping any settlement on fiscal stimulus, markets might want to shock Washington to get its consideration. That leads again to the Fed as the one doable circuit breaker.
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