If Gold Pulls Back, It Will Most Likely “Be Short And Shallow”

June 21, 2019

Gold prices surged to a new six-year high today after markets digested the U.S. Federal Reserve signaling a move to looser policies and other central banks including the ECB made similar dovish signals.

The Fed said it was ready to cut interest rates as soon as this July due to the very uncertain outlook and the slowing U.S. economy. This led to a sharp fall in the dollar and gold gaining 4% and breaking above the key $1,400 price level.

The economic recovery in the U.S. looks very ‘long in the tooth’ and the move to looser monetary policies by the Fed will further impact the dollar and should see higher gold prices in the coming months. 

The very uncertain situation in the Middle East and the real risk of a military confrontation between the U.S. and Iran saw oil prices surge 6%. This will also support gold and means that any pullback will likely be short and shallow.

We are seeing a new sense of urgency from investors in recent days and an increase in safe haven buying due to concerns about the geopolitical and economic outlook. 

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Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth. 

One cubic foot of gold weighs more than half a ton (1,306 pounds).