Gold price has further to run as USD on cusp of bear trend – Bannockburn Global Forex
Gold prices have seen an incredible surge of momentum with prices pushing to a fresh nine-year high above $1,850 an ounce and one market strategist sees gold prices moving higher through the rest of the year.
Marc Chandler, chief market strategist at Bannockburn Global Forex has been bullish on gold since the start of the year and in an interview with Kitco News, he said that in the current environment gold prices could easily push to $2,000; it’s just a matter of when.
Chandler’s comments come as August gold futures last traded at $1,863.80 an ounce, up 1% on the day.
“I think that we have some upside still on gold and $2,000 might just be a conservative estimates,” he said.
However, Chandler added that investors should use some caution at current levels as markets don’t always go up in a straight line.
“I think it does make me cautious seeing the strong, upward momentum. I do look into the technical indicators and a lot of those are getting stretched,” he said. “But it’s not a question for me of liquidating my goal position, it's more a question of being prepared for a pullback.”
Low interest rates for longer and further weakness in the U.S. dollar are major tailwinds for the precious metal, Chandler said. He added that the U.S. dollar appears to be on the cusp of a new multi-year bear market.
“I've been bearish the dollar and it sort of lined up with my bullish gold view. But now I think a lot of other people have joined his dollar bear party and I think gold benefits from that as well,” he said.
Looking at interest rates, Chandler said that gold will continue to shine as $14 trillion in global sovereign debt remains in negative territory. He added investors should expect to see more government debt in the future.
“Initially it was about stabilizing the markets. And I think now I think most people agree that markets have been stabilized, but the second phase of what the fed has got to do is really support the economy,” he said. “I think that will necessitate expanding its balance sheet further.”