Opinion with Peter Hug
Gold Prices Continue To Look Constructive
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - It has been some time since my last post, primarily because there has been little to say. The last time I commented, I was constructive on the gold market and believed we had put in the bottom for 2018 back in August. We have been one of the few houses that have remained skeptical on the Fed’s outlook for rate increases in 2019. We continue to believe the Fed will move in December but will likely tone down any aggressive rhetoric for 2019; instead policymakers will likely indicate future rate hikes will be solely data driven. This will create a more dynamic and volatile market in 2019. The first round of volatility that the market will need to overcome will be this weekend’s G-20 meeting, where all eyes will be on the U.S./China trade relationship. A reversal of tariff policy or at a minimum a hold on future tariffs should be positive for the base and industrial metals and should push silver higher, at least in relationship to gold. We favor a trade into the Fed December meeting. Looking for possible weakness into the meeting and at the announcement, but would buy this dip with the expectation of a rally into January.