Bloomberg Intelligence says that gold is beginning a new bull run, after ending 2019 on a six-year high. In its commodity outlook for the New Year, it points to high stock market volatility, which is expected to continue long term, and the weakening US dollar as very favourable to a new run for 2020.
Mike McGlone, senior market strategist at Bloomberg Intelligence explained in this month’s commodity outlook, “Gold is embarking on a new bull market. The dollar-denominated precious metal is ending 2019 at the best level in six years and has made new highs in other currencies, notably the euro… About 1,400 Euro an ounce, which held resistance for five years, is good initial support at the start of the 2020s. The 2013 peak of about $1,700 is initial resistance.
“A primary component for more gold-price gains in 2020 and the coming decade is higher stock-market volatility … In the next year and decade, it’s unlikely stock-market volatility can sustain such depressed levels, which favour appreciating gold. The unlikeliness of the record-high greenback to keep appreciating with similar velocity as it has since 2014 is an additional tailwind for gold prices.”
With these favourable factors in place, now is the time to buy to really benefit from this new 2020 bull run.