Gold: Precious metal will join the “All-Time High Club” in 2020, says this analyst

Another bullish price target for gold recently came from Bloomberg. Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, sees a good chance that gold will reach a new high next year.

 

“It’s a new year and a new decade and we think gold is ready to follow the dollar and stocks to new highs. When should the main question be, especially if the stock market and the Greenback succumb to a normal average reversal? Without a new higher dollar and stock price plateau, gold will join the All-Time Highs Club,” the analyst is quoted on the news page kitco news.

Above all, he emphasizes the relative strength to the trade-weighted dollar, which climbed by 2 percent this year. Gold, on the other hand, was nevertheless able to rise by 15 percent, which, according to the analyst, gives the precious metal a solid foundation for further price gains next year.

 

“Gold should remain a stable asset unless the strength of stocks and dollars persists. This is unlikely, especially as we approach a controversial US presidential election. The strength of the gold price despite record highs for the dollar and stock markets points to a cheaper final for the quasi-currency … Five years of consolidation have created a solid basis for price appreciation … A high for the dollar would be a key catalyst for a rally in dollar-denominated gold.”

In 2019 gold was able to free itself from its five-year captivity within the price zone between 1100 and 1350 dollars, after the precious metal last traded at its all-time high of 1900 dollars in 2011. In May of this year, the chart technical breakout succeeded and a 6-year high of over 1550 dollars was conquered in August.

The driving indicators for the price were and are the weakening economic data, which since this year has caused the alarm sirens to howl, as well as the growing uncertainty of the tariff war between the USA and China and the chaotic Brexit in Europe. A further elementary price driver is the continued loose monetary policy of the central banks, whose zero-interest environment is giving gold a boost as a solid alternative currency, as investors are increasingly looking for investments to maintain the value of their own capital. Gold, with its resistance to inflation due to scarcity, is often the means of choice. Many central banks around the world have also been increasing their gold holdings for some time.