What Would Trigger A "Tremendous Bull Rally" In Gold?

Monday, 8 October 2018 20:56 WIB

Gold OutlookGold Corner


Gold should face headwinds in the near-term future, but a few years out, over-tightening by the Fed could send the economy into a recession and push gold prices up substantially, this according to Erik Norland, Executive Director and Senior Economist of CME Group.

'We have a vast expansion in deficits in the United States, and if the Fed over-tightens and were to put the economy into a recession and then have to cut rates back, we could see a tremendous, tremendous bull rally in gold,' Norland told Kitco News.

Norland noted that this scenario may not materialize for a while.

“At the moment, that’s not in the cards for the next few months,” Norland said.

Gold has a very strong negative correlation with the dollar, and investors should be trading gold like a currency, he said.

“I think that you really have to look at gold here as a currency that’s trending with the euro, the pound, the renminbi, and other currencies versus the U.S. dollar,” Norland said.

Source: Kitco


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