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Gold Fever is Spreading

Written by Staff Writer
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800px Gold bullion 2Gold Fever is Spreading -Innes/FX Empire/Yahoo Finance
"Gold prices climbed to the highest levels in more than a year. But adding to Golds allure is that prices traded well despite rebounding equities and a firmer USD. And while the prospect of lower U.S. rates and dovish Fed expectations remain supportive, Gold appeal goes well beyond that and is moving higher on own its accord as a safe and inexpensive hedge against the abundance of tail risks rapidly wagging.

The G20 summit will be significant for risk assets and while we don't know if tariffs will escalate from here, but we do know there's a substantial risk that they will. And while we remain unsure how the Fed will react this week, but we do know that if tariffs escalate, it will be a potent threat to U.S. growth and so the likelihood of an aggressive Fed cut will also rise. Gold represents insurance against those risks. If you live in tornado alley you would be crazy not to buy home insurance so with a category five recessionary storms brewing; it only makes sense to purchase Gold as portfolio insurance....And despite all the talk about lower U.S. rates and trade war hedges, it's the official sector that remains the consistent pillar of support. And given the move to de-dollarize reserve, Central bank demand will likely continue especially with trade war and the geopolitical risk abound....I remain unwaveringly bullish on Gold and continue to buy as it remains one of my highest conviction trade into 2020."