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CrossBorder: gold could test $2,000 on Fed, PBOC monetary policy

Kitco News

Gold could test $2,000 an ounce in the year ahead on further loosening of monetary policy by the U.S. Federal Reserve and People’s Bank of China, said CrossBorder Capital. The coronavirus is impacting global economic growth, with Chinese data showing use of public transportation has fallen by 80%. The PBOC has made limited financial injections, “but expect more,” CrossBorder said. Meanwhile, the Fed is expected to continue expanding its balance sheet. The firm said “periods of strong liquidity injections are often associated with a rising gold price. Gold, much more than many other assets, benefits from buoyant central-bank liquidity.” Both Fed and PBOC actions matter, the firm continued. “It would seem that gold could easily retest $2,000/oz over the next 12 months,” CrossBorder said. “Moreover, its gains do not depend on a weak dollar. In fact, looking ahead, we see the U.S. unit broadly stable; gold looks set to rise against most currencies.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

FXTM: bias remains to upside in gold market

Wednesday February 26, 2020 09:14

Gold prices have fallen some 3% from their seven-year highs earlier this week, but the bias remains to the upside, said FXTM. As of 8:41 a.m. EST, spot metal was at $1,636.20 an ounce, up $1.60 for the day but well below Monday’s peak of $1,687.90. FXTM said gold is expected “remain supported above $1,590 as investors continue to cling to safety, while assessing the coronavirus’ impact on global economic conditions. Bullion could yet make another run towards the psychological $1,700 mark, especially if the negative virus impact shows up in the hard data out of developed economies over the coming months.”

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