Here’s why Gold is a ‘massive buying opportunity’ right now [Video]
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After an explosive start to July, that saw Gold hit yet another all-time record high of $2,483 an ounce – prices have pulled back as trader’s bank windfall profits to offset losses in other asset classes such as Equities.
This week, U.S Equity Indices recorded their worst day since October 2022 after lacklustre results from index heavyweights Alphabet and Tesla unleashed a cascading sell-off across the entire technology sector.
According to JP Morgan, the $1 trillion selloff in Equities this week could be the start of a bigger correction ahead – amid glaring evidence of market froth and many big tech stocks still trading at higher-than-average valuations.
In a note to clients, JP Morgan advised staying defensive, with the Equities backdrop looking “Problematic”. The banks analysts closed the note by reissuing their call to “Sell Stocks and Buy Gold”.
While the fundamental picture looks increasingly volatile and uncertain for Equities – on the flipside the fundamental backdrop continues to remain ultra-bullish for Gold due an ever-growing number of macro and geopolitical tailwinds that are currently unfolding.
These include; persistent geopolitical tensions, strong central bank purchases, growing demand from China as a hedge against economic instability in the world’s second-largest economy, along with the high-stakes U.S presidential election.
Traders are already starting to price in a Donald Trump victory in November – which could spur a “new super bull” in Gold off the back of a multitude of factors including – tariffs of 60% or higher on foreign goods, a surge in infrastructure spending and tighter sanctions on Iranian oil – all of which could reignite global inflation.
During Donald Trump’s previous presidency – Gold price rose substantially, soaring from $1,200 an ounce when he took office in January 2017 to over $1,900 an ounce in his final month, which was January 2021.
Whichever way you look at it, one thing is clear. The possibility of Donald Trump's return to the White House will also inevitably mark the return of the famous “Trump Trade”.
And that's unquestionably ultra-bullish for Gold.
To quote analysts at GSC Commodity Intelligence – “This is the pullback so many traders who missed out on the first leg of the current Supercycle in Gold have been waiting for”.
The analysts went on to doubling down on their view that “2024 Is The Year of The Metals and any substantial pullbacks should be viewed as massive buying opportunities because Gold prices won't stay this low for long”.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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