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Get Ready: ‘Big Breakout For Gold’ Is Coming — Bloomberg Intelligence

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Get Ready: ‘Big Breakout For Gold’ Is Coming — Bloomberg Intelligence

(Kitco News) - A gold rally is in the cards for April, said Bloomberg Intelligence commodity strategist Mike McGlone, adding that not much can get in the way of that happening.

“Something unusual would have to occur for gold's primary drivers to prevent the next leg of a price rally,” McGlone said in a note published on Thursday. “The Fed's March rate hike gave increasingly compressed gold the green light to spring higher. Nascent recoveries in VIX volatility and inflation, plus a declining dollar, favor richer gold.”

Bloomberg’s note was released after gold prices dropped down to around $1,325 on Wednesday, followed by an uneventful trading session on Thursday.

April Comex gold futures were last at $1,325.40, up 0.09% on the day, while spot gold on Kitco.com was at $1,325, up 0.05% on the day.

Metals will kick-off April’s trading on a solid footing, especially when compared to a “wobbly” stock market, McGlone said.

“Extremely compressed gold is poised to break above resistance, while industrial metals are likely to recover from the most significant test of support in the nascent bull market,” the strategist wrote. “Primary metals demand vs. supply drivers are increasingly favorable along with a declining dollar.”

The only elements which could reverse a bullish trend in gold are a recovery in inflation and a reversal in stock-market volatility, which are both unlikely to happen, McGlone added.

Other gold analysts seem to agree with McGlone’s rally expectations, telling Kitco News on Thursday not to lose faith in the yellow metal, which is expected to eventually break through the $1,400 level.

“The more ground gold can hold the better it will do when the U.S. dollar eventually turns. I expect the U.S. dollar will lose another 5% this year and that will be bullish for gold,” said Bill Baruch, president of Blue Line Futures.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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