Gold Outlook 2018
Gold Outlook 2018
A good take on spot gold price trading range for 2018.
Gold investors might not see a sustained rally for a long time as the metal is far from being out of the woods and may potentially retest lows of $1,050 an ounce, according to John LaForge, head of real asset strategy for Wells Fargo. “On a secular basis, commodities go through periods of 20-year bear markets on average – we get stuck in the year-to-year but the history of commodity super cycles is we still have some time to work off supply – in the case of gold, you are looking at lots of supply,” said LaForge, listing one of the fundamental reasons the price may remain under pressure.
LaForge does not subscribe to the theory of peak gold and says that any rallies the metal saw this year were short-lived occurrences. “What happens in these longer-term secular bear markets is you do get multiple rallies. If you look at the ‘80s and ‘90s, gold was stuck in a range roughly between $250-$400 an ounce. That’s the bear market; it bounces back and forth,” he said in an interview with Kitco News.
Now, another gold trader says: According to my charts, gold and silver are in a super-cycle bull market that started in 2001. There are also shorter cycles within the super-cycles, that last about 7-8 years. We started a new 7-8 year bull market in December 2015. Compare this to the US Dollar, which entered a new 7-8 year bear market in January 2017 and has been in a super-cycle bear market for over 30 years. This dip in the PM’s is just the drop before the big pop, IMHO. Great buying opportunity.
Yet, another opinion: Gold is in oversupply? China is buying the annual production. What if China continues to de-dollarise and hold gold as a reserve currency. Less dollars means lower gold price but higher in other currencies. In AUD the gold price is almost at all time highs. Same in many other currencies. I hold gold as an alternate to my national currency. I can hedge by buying USD. Maybe USD and gold will rise together as the system approaches a much needed reset.
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