‘Relatively cheap’ gold may have great upside potential – analyst
Gold has become a relatively cheap investment opportunity which may continue rising in price, even after exceeding $1,900 per ounce, according to Richard Kelly, head of global strategy at TD Securities.
“Gold is relatively cheap, so when you’re trying to think about that positioning, gold is definitely one that still has catch-up potential,” the strategist said, as quoted by CNBC.
He added that “gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.”
Last August, spot gold price reached a record high of $2,063 per troy ounce. The current price of the precious metal stands around $1,887.
A sharp jump in US Treasury yields, along with an anticipated interest-rate hike, put gold bullion under pressure in the first few months of 2021.
According to the analyst, the dollar and other major currencies like the euro were now looking “rich” on a relative basis, suggesting a possible dip against the price of gold.
He added that even if gold were to reach $1,900, “or even above, that’s still an area that does have scope given what we’re seeing with policy rates, given what we’re seeing with inflation dynamics and just overall under-positioning on that side of things. That’s certainly a catch-up trade that can have more legs.”
He added that “gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.”
Last August, spot gold price reached a record high of $2,063 per troy ounce. The current price of the precious metal stands around $1,887.
A sharp jump in US Treasury yields, along with an anticipated interest-rate hike, put gold bullion under pressure in the first few months of 2021.
According to the analyst, the dollar and other major currencies like the euro were now looking “rich” on a relative basis, suggesting a possible dip against the price of gold.
He added that even if gold were to reach $1,900, “or even above, that’s still an area that does have scope given what we’re seeing with policy rates, given what we’re seeing with inflation dynamics and just overall under-positioning on that side of things. That’s certainly a catch-up trade that can have more legs.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
