Despite some obstacles, the gold price will regain its high of $ 2,000 an ounce in the coming months, analysts at Standard Chartered believe.
In November, gold was overbought when the price of an ounce of the yellow metal fell below $ 1,800 an ounce, the experts said. Last month, however, the largest outflow of funds for listed gold products (ETP) since November 2016 was seen, it said.
It was estimated that there were 112 tons of runoff in November, suggesting the net releases were the largest since November 2016 (the last US election), according to Standard Chartered. If the cash outflows continue at this rate, December should be the month with the second largest cash outflow ever – after April 2013. In addition, the sharp drop in prices in November indicates that the weak long positions have now been pushed out of the market.
For gold, this means that there is a good chance that the precious metal will return to the USD 2,000 per ounce mark in the first quarter of next year, despite short-term resistance in certain areas. Finally, the overarching macro factors remain very positive for gold, including a weaker US dollar and loose monetary policy around the world.
Although trading in a lower range is likely in the short term, in addition to short-term corrections, the weak US dollar, negative real interest rates, inflation concerns and the expectation of further economic stimulus programs with a simultaneous loose monetary policy of the central banks would rather suggest a rise in the price of gold, according to Standard Chartered.
Comprehensive vaccinations and an economic recovery from the Corona crisis are not expected before the second half of 2021, which leaves gold with upside potential in the meantime. The market has interpreted news about vaccines to mean that this represents a return to normal. The analysts point out, however, that liquidity and the level of debt worldwide are still high and support the gold price.
Standard Chartered also noted that the government’s widespread response this year will increase the ability to respond to any new “[Wirtschafts]Shock “would restrict – the coffers are already comparatively empty, it said. A long-term loose monetary policy and unprecedented economic stimulus programs would definitely bode well for the gold price.
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