Recent report suggests gold could edge above $1400


The ongoing turbulence in global markets and higher levels of risk overall could see gold edging over $1400 in the short term future according to analysts. With tensions ratcheted up between China and US over trade disagreements and import taxes and the UK still in Brexit negotiations, investors are starting to feel the creeping shadow of uncertainty and the possibility of a recession.

Scotiabank’s commodity strategist Nicky Shiels says in the latest update that commodity hedging is taking on new importance in a market that is increasingly risk-prone. Shiels said in the update, “[gold] is viewed generally as a hedge to the dollar alongside to being a hedge to inflationary policies and geopolitical risks I believe gold has a chance of reaching $1,400 this year.”

Nick Likakis, who is Scotiabank global head of Commodity Derivatives Origination added, “[Last year] showed just how volatile global markets could get. We had a backdrop of central bank policy uncertainty, increase in global trade wars, and growing geopolitical tensions. We saw commodity prices range through extreme highs and lows.”

Gold did go higher than $1300 at the height of the US-China trade spat earlier this week but has since dropped below that as markets settled following the initial flurry of stock sales.

Overall, there has been a growing trend towards uncertainty and volatility over the last several months meaning it is more likely that gold prices will peak as investors look for safe havens and strive to remove risk and volatility from portfolios. The takeaway? Gold is likely to go up again and soon – and it could well be much higher than what we’re used to seeing.

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