Bloomberg Intelligence has given gold another resounding boost by citing the precious metal as its top pick to advance in 2020. The independent research arm of Bloomberg made the comments in its newly published commodity outlook. The firm’s senior commodity strategist Mike McGlone said that there were lots of positive factors at play which strongly favour gains for gold and make it the most promising of asset classes for this year.
He said, “Among the few assets up in this tumultuous year, gold… [is] building foundations for further price appreciation.
“Our graphic depicts gold consolidating above what had been key resistance of $1,700 an ounce before the March swoon. Every day that passes above this level builds a firmer base for the metal to make the next move in its stair-step rally. Gold should be a primary beneficiary of more aggressive fiscal and monetary stimulus needed to arrest commodity price deflation … Depression-like global conditions should press the BCOM below the 2016 trough and gold above its all-time high, about $1,900 an ounce. There’s little to stop the gold [going] up.
“Enduring U.S.-China trade tension and an unlikely V-shaped global economic recovery keep our price view as unfavorable for broad commodities and favorable for gold. We see little to prevent the metal from reaching all-time highs and the Bloomberg Commodity Spot Index from extending its 2016 low. The coronavirus is creating almost perfect conditions for commodity price deflation, central-bank easing and rising gold prices, in our view. An elusive end in sight for global quantitative easing should eventually spur commodity inflation, and most end-game scenarios point to gold as a primary beneficiary.”