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Gold Price's Next Target Could Be $1,600 Says Peter Hug

Kitco News

(Kitco News) - Gold has breached critical resistance levels and the momentum is skewed to the upside, said Peter Hug, global trading director of Kitco Metals.

“I’m very constructive this gold market. There’s just a lot of issues in the market. Ignoring the Chinese tariff issue, which is obviously a big issue, we have the Italian banks that are in serious financial trouble…you’ve got the issue with Hong Kong and China, so there are just so many macro issues out here that suggest that you do not want to be not in the gold market,” Hug told Kitco News. “Any kind of pull back is a buying opportunity.”

Hug said that should $1,520 an ounce be consolidated for gold, the next price target could be $1,600.

On bear market fears, Hug noted that an inversion of the yield curve has historically had a 95% accurate in predicting a recession, but can usually lead an actual economic downturn by a year to 18 months.

“Although the inversion is coming, and that’s assuming the inversion remains in place, that can be fixed fairly quickly by the Fed lowering rates, but assuming the inversion stays in place we’d be looking for a recession sometime in 2020,” he said.

Relative to gold, silver is “dirt cheap” at current levels and retail investors, particularly in Hong Kong, are jumping on the white metal, even more so than they are with gold, Hug added.

“We’re seeing extreme retail demand for physical silver out of our Hong Kong office and that has not occurred in the last two years. We’re having trouble keeping up with physical bar demand out of our Hong Kong office right now. The mints are basically producing at full capacity,” he said.

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.