Four key drivers behind gold

UOB Price Estimates:

  • At the end of the year – $ 1,550
  • Q1 for 2020 – $ 1600
  • Q2 and Q3 of 2020 – 1650

The four factors:

  • The Federal Reserve is expected to continue cutting interest rates
  • Bond yields are expected to continue to fall
  • Asian and EM banks continue to increase their gold reserves
  • The strong demand for safe heaven assets
  • All four factors are solidifying over time and approaching the end of the year, but several negative aspects are growing:

Net long positions have increased significantly, approaching a record that can deplete the rally
This is a prerequisite for speeding up profits if the above factors start to lose their strength
On the other hand, while the foundation is on the gold side, the amount of net positions may remain at extreme levels for a longer period.

 Trader Martin Nikolov

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