Commodity Report: Gold price forecast April 2020 [Video]
|The first three-months of 2020 have certainly proved to be an extremely lucrative quarter for commodities traders.
Last week, the full spectrum of precious metal markets posted their biggest one-day moves ever in the history after the US Federal Reserve promised to unleash “Unlimited Quantitative Easing” – boosting the asset classes’ status as a store of wealth and an inflation hedge.
Following the announcement, Gold surged by $180 an ounce, climbing over 12% in less than a week. This marks Gold’s biggest weekly move ever in history, surpassing the October 25, 2011 advance of more than $70 an ounce that propelled prices above $1,700.
During the same period last week, Silver soared over 30%, whilst Palladium skyrocketed by a staggering 62%, to record its biggest weekly rise ever in history.
To put that into perspective – that’s the exact percentage gain – Palladium returned throughout the whole of 2019.
As March comes to a close, we can now expect to see a very normal corrective pullback in precious metal prices as traders square up for the quarter and bank profits.
This will ultimately present some very attractive opportunities to “buy the dip” heading into April.
As we head into the second quarter of 2020, the price action across the metals complex continues to resemble the trend last seen during the 2008 Global Finance Crisis.
Although initially, precious metals suffered from the widespread sell-offs midst the Global Finance Crisis – prices quickly recovered when the Federal Reserve announced Quantitative Easing (QE). This pivotal event set the stage for the metals to soars for the next three years – until 2011.
We are now beginning to see a similar pattern emerge as the Fed lunches an unprecedented open-ended Quantitative Easing program.
Between 2008 and 2014, the Fed enacted three QE programs, totalling $4.7 trillion in economic stimulus, asset purchases and rate cuts. We’re now on the verge of embarking on something even bigger – the central bank’s largest money printing program in history.
And it's just beginning...
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