Hope for gold prices to push through $2,000 lies with Fed's next move
(Kitco News) - Policy response is what is needed for gold prices to push higher, this according to Dan Oliver, partner of Myrmikan Capital.
“My expectation is the whole world is waiting on the policy response, so if they don’t respond, the whole [system] is going to totally implode,” Oliver told Kitco News. “Everyone knows the Fed’s DNA is built on avoiding the next great depression, so they will print until their fingers bleed to avoid that happening.”
Gold prices have met resistance during the recent stock market selloff, despite heightened fears around the coronavirus and a coming recession.
Much of gold’s resistance is due to margin calls and investors needing to sell gold for cash, he Oliver said.
He added, a major downside risk is the disruption to the global supply chain caused by the coronavirus, as monetary stimulus would still be ineffective if manufacturers lack the parts and components to produce goods.