Gold Bull Market On the Loose?
Gold Bull Market On the Loose? by Fred Imbert for CNBC
It’s a rare occasion that I publish anything from CNBC – read it while you can.
- Gold is trading above $1,400 per ounce for the first time since 2013 and is up more than 12% year to date.
- The metal could build on those gains as the Federal Reserve gets set to lower rates, U.S. economic activity slows and trade tensions remain.
- Historically, gold has rallied when the Fed lowers rates because such moves depress yields and the U.S. dollar. Gold is also used by investors as a safe haven to trade amid geopolitical tensions.
- “If our judgment is correct and the U.S. economy is softening and inflation will fall moving forward and yields are going to stay low for an extended period of time, then that’s bullish for gold,” one strategist says.
Gold has been on fire this year, and some investors think the precious metal is poised to do something it has only done twice since World War II: enter a major bull market.
The metal is trading above $1,400 per ounce for the first time since 2013 and is up more than 12% year to date. That also represents a rally of more than 35% since it broke below $1,100 per ounce in late 2015.
In its strictest sense, a bull market is considered to be a gain of more than 20% from the most recent low. But pops like the one that just occurred aren’t considered a genuine bull market by most investors but rather just a cyclical upswing. Instead they would like to see a rally that lasts for years and involves bigger gains.