Investor Fear Will Drive Gold Higher - Sucden Financial
In its quarter metals report, analysts at international brokerage firm Sucden Financial said that they see signs of growing investor confidence in the gold market as prices continue to hold critical support above $1,300 an ounce. April gold futures last traded at $1,311 an ounce, down 0.55% on the day.
They added that growing appetite for bullion as a safe-haven asset should push prices to $1,350 an ounce.
“Fear-buying will remain a prevalent investment strategy...” the analysts said. “Gold will likely continue to act as an investment haven as the US economy faces further economic headwinds.”
The French firm noted that concerns regarding slowing global economic growth are outweighing disappointing inflation pressures. The analysts added that the U.S. Economic Policy Uncertainty Index is current trading around a 9-month high at 276 points.
“Bullish sentiment is supported by strong macroeconomic fundamentals,” the analysts said. “Interest rate policies have been put on hold as lower growth continues through to 2019.”
Not only is the world grappling with low economic growth, but Sucden said that the potential for a global debt crisis could also drive gold prices and demand higher.
“The US has [$1 trillion] to refinance in 2019 and China is flooded with property and local-government debts,” the analysts said.