Despite the small declines seen this week we are on course to see gold reach ‘record high territory’ this year as the global economy struggles to recover momentum according to one industry expert.
Senior market analyst, Edward Moya says that conditions are right to push gold towards unseen levels, even as some countries begin the process of getting their economic wheels turning once again.
He explains, “Gold prices are rallying as investors start to grow sceptical of the reopening risk-on rally. Gold’s bullish outlook expects economic activity to have a much slower rebound this quarter and that should continue to support expectations that global monetary and fiscal stimulus efforts will only intensify.
“The strong dollar has been a nuisance for the gold trade, but that should not be a permanent problem thanks to the skyrocketing US debt issuance. The US will eventually have a deficit problem and the tremendous stimulus efforts by the Fed will eventually break the dollar’s back. The macro driver continues to point to a rally to record high territory later this year.”
The clear message here is to buy now while the dollar is strong to be in prime position for the upcoming bull run which is inevitable given the amount of economic stimulus required for the world’s stricken economies.