There Is "Good Cause" To Be Optimistic About Gold - State Street Global Advisors
“The middle two quarters of 2018 were bad for gold because the dollar was extraordinarily strong, so was the domestic equity market in the U.S. The influence of all that tended to wane in December, so gold picked up very, very nicely,” Milling-Stanley told Kitco News.
Milling-Stanley’s comments come as a weaker U.S. dollar pushed gold up to 10-month highs on Tuesday, with April gold futures last trading at $1,339.70 an ounce, up 1.32% on the day.
“I think most people are expecting gold to do well this year. Most of the analysts’ forecasts I’ve seen for the year as a whole are a good deal higher than where we are,” he said.
Milling-Stanley noted that forecasts for gold prices in 2019 range from $1,350 an ounce to higher than $1,400, which would represent more than a 4% increase from current levels.
He added that it would be unlikely to see $1,500 an ounce unless there is a sudden surge of money flowing into the gold sector, similar to what we saw in 2011.
2013 saw the last major exodus of “hot money” away from gold into other commodities and equities, he said, but some money is returning to the space.
“GLD had inflows of $1.8 billion in the fourth quarter, which was tremendous. Those inflows continued at the beginning of 2019,” he said.