Abstract: UBS Global Wealth Management analysts are optimistic that, stimulated by the new round of US epidemic prevention assistance programs and rising inflation expectations, gold may still rise to $2,000 per ounce in the next few months.
On November 11th, on Monday this week, the gold shorts, with the help of Pfizer vaccine, suppressed the price of gold plummeting by $100 to the lowest point of 1850.
Seeing that the low of 1850 before the daily line will be broken, and the downward pattern of the daily line may be opened, then will gold be adjusted again next?
But a series of fundamentals show that it is difficult for gold to fall in the medium and long term. Whether in terms of the global economy hit by the new crown epidemic, loose monetary policy, etc., the factors that support the rise of gold are still there.
On November 10, a number of Fed officials appeared to speak and talked about monetary easing and other issues. It is expected that the Fed will continue its monetary easing policy this year, which will increase the supply of US dollars and bring support to safe-haven gold.
Eric Rosengren, chairman of the Boston Federal Reserve Bank, said in a speech: "Easy monetary policy requires more measures to prevent rising financial stability risks. Without financial stability governance and tools, the economic recession may become more severe."
Analyst Wayne Gordon said that the Fed is expected to curb any substantial increase in nominal interest rates, and they expect the United States will also launch another round of stimulus plans ranging from 500 billion to 1 trillion US dollars.
UBS Global Wealth Management analysts are optimistic that, stimulated by a new round of US anti-epidemic assistance programs and rising inflation expectations, gold may still rise to US$2,000 per ounce in the next few months.
On Monday this week, after Pfizer and Biotech released positive news about the potential vaccine for the new coronavirus, the gold market saw its worst single-day sell-off in seven years. Spot gold plummeted by $100, but the closing line remained above the previous daily low of $1,850 per ounce.
John LaForge, director of real estate strategy at Wells Fargo, said he will still maintain his updated year-end target price of US$2,100 per ounce.
LaForge pointed out that since the price of gold hit a historical high above $2,000 per ounce, the price of gold has successfully held a key support around $1,850 per ounce, indicating the potential strength of the market.
He said that another factor that will continue to support gold prices is that improved economic growth may lead to higher inflation. He also said that economists at Wells Fargo do not expect significant growth in 2021.
LaForge finally stated that he is still optimistic about gold because countries continue to print money and devalue currencies. He is skeptical that the price of gold can return to above $2,000 per ounce before the end of the year, but he is much more confident that the price of gold will reach the $2300 target set in 2021.