It is undeniable that gold price has not been performing well this past few days. But despite this fact authorities and veteran investors are very positive about the prediction of Gold Bull Gold Bull Market to Happen Before the Year Ends.
The current drop in precious metal price is due to gold’s current correlation with risky assets such as copper, but despite its current price drop some countries continuously buy and stock gold. This may be an indication that investor doesn’t totally lost their confidence in gold. And possibly this could also indicate that they still recognize gold and other precious metals as the best hedge against the ongoing global inflation and its ill economic effects.
To have a closer look into the reason why we must not lose hope and confidence in gold is discussed in detail in the article caption bellow.
Gold Bull Market to Happen Before the Year Ends
Gold could regain its safe-haven status before the year-end, analysts say, though investors should expect further near-term price volatility as the metal maintains its correlation with risky assets.
In recent months, gold has traded broadly in line with industrial metals and equities as investors seek cash due to fears over the euro-zone debt crisis and slowing global growth.
According to data from the International Monetary Fund released last week, Mexico, Kazakhstan and Ukraine were active buyers in the gold market in April, while the Philippines’ central bank lifted its reserves by more than one million troy ounces in March. It was the seventh consecutive month the Philippine bank added to its official gold reserves.
Gold’s correlation with copper, often seen as an indicator of risk appetite and a bellwether for economic health, has strengthened since the start of May, as fears over a Greek exit from the euro zone intensify.
In the near term, gold is vulnerable to shifts in macroeconomic sentiment, Societe Generale Metals Analyst Robin Bhar said. However, he noted that gold can regain its safe-haven status following major risk-off events.
He cited gold’s correction and recovery following Lehman Brothers’ collapse in September 2008 as an example of gold’s ability to reassert its safe haven status after a period of trading in line with risky assets. Gold surged on safe-haven buying in the immediate aftermath of Lehman’s collapse, before falling over the following two months amid cross asset class liquidation. It then resumed its uptrend in December 2008.
In Mr. Bhar’s view, a return to prices of $1,640-1,660 per ounce would be the minimum necessary in today’s market to indicate the return of the safe-haven trade.
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Though gold may be in bad shape these past few days because of its bad association with copper, nevertheless it still holds a promising potential to reverse the current negative trend of gold price in the market.
Indeed Gold Bull Market to Happen Before the Year Ends is something that everyone should anticipate and look forward to.
Nonetheless authorities’ gives a forewarning that there will be a close volatility in gold price before it goes up again before the year ends.