The huge momentum behind gold at the moment can be seen being led by a bull strong market. The price of gold has extended its push to over $1,400 an ounce, a level that has not been seen since September 2013. This recent surge in popularity of the commodity comes after the Federal Reserve and other central US banks took a less aggressive stance on their monetary policies. Combine this with the possibility of US sanctions against Iran, and the additional meeting between the presidents of China and the US, we are seeing a long sought after Bull Run on precious metal.

Gold bullion has regained its popularity after the Federal Reserve signaled it was preparing for a more relaxed policy, and the European central bank hinted at a shared sentiment, which would keep real rates lower for a longer period of time, and with the current geopolitical risks associated with other investments, brought a new demand for a slow steady holding. Russ Koesterich a portfolio manager for BlackRock Global, has commented saying that gold could see an even bigger rally before the year is out, but between then and now we are more than likely to see some pullback.

Edward Moya, a senior market analyst for Oanda Corporation, issued a note to investors saying “Gold bulls are back in control, the question is no longer will the Fed ease, but by how much? The Fed historically likes to kick on an easing cycle with a bang and a 50 basis point cut should become the base case.” Jerome Powell, the chairman for the Federal Reserve is set to speak at the council of foreign relations this Tuesday in New York, where he will outline and discuss his views on the problems that the US economy is currently facing.

Prices of gold soared over 4.3% last week, the biggest weekly gain since April of 2016, and what we have seen is that a recent weakness in the US dollar has pushed investors into holding their funds in any other way they can. With more investors, putting their money into stocks, and gold it shows that gold has more upside than downside. Hedge Funds and other large scale investment firms, have also increased their current holding in gold futures and options to the highest levels since February of 2018. Holdings in bullion-backed exchange-traded funds expanded to the highest level since April 2013 as of Friday.


Catherine Chen – Walter International