Three drivers to support gold in the short-term – ING
|Oliver Nugent, Commodities Strategist at ING argued that despite last week’s drop, gold still remains exposed to upside risks, as the three main fundamental drivers continue to remain supportive.
Key Quotes:
The “fundamental case for holding” the yellow metal remains intact.
“We look to physical demand, geopolitics, and inflation to provide support.”
“Things shouldn’t get much worse, but it will take time before we see improvement.”
“We expect longer-term holders/consumers to build a floor for the yellow metal even if it remains shunned by active money managers hunting for more attractive near-term returns.”
“We look to the flattening yield curve and burgeoning twin trade deficits against the looming catalyst of mid-year elections or nearer term trade spats that could highlight the US policy/political uncertainties and spell a reversal for the greenback.”
“As the dollar eases, it will be game back on for our bullish gold view, given our expectations for inflation to pick up substantially this year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.