A gold industry expert says that we can expect more gains for gold and a resumption of the bull run following the current period of correction. Market analyst Jesse Felder said that we are seeing a ‘healthy’ period of correction following the record-busting months of last summer, which saw the precious metal ascend to its highest ever price.
Currently trading at around £1,251 ($1,724), gold has faced headwinds in the last few weeks as a result of rising bond yields, despite the chairman of the Federal Reserve, Jerome Powell dismissing those increases. The yields are trading at the 1.6% mark, which is the healthiest level they’ve reached in the last 12 months; something which is temporarily stunting gold’s price acceleration. Felder said this situation won’t last, with the analyst expecting the bubble to burst sooner rather than later, and the economic factors supporting stronger gold prices, to once again take the reins.
In a report issued on Wednesday, Felder explained, “The rise in rates has already been dramatic and there is reason to believe it may be nearer to its end than its beginning. At the same time, inflation appears to be on the verge of picking up once again. If so, real rates will fall and gold will likely resume its uptrend.”
Felder cites fast rising levels of government debt as promising for gold too, though that factor may have been overshadowed by vaccines news and bond yields, it’s very present and very supportive of gold gains. Felder said, “Currently, the CBO estimates that the 2021 deficit will be £1.66 trillion ($2.3 trillion), slightly less than last year’s total. However, this does not include the £1.37 trillion ($1.9 trillion) stimulus package recently passed by congress. Nor does it include the possibility of a new £2.17 trillion ($3 trillion) infrastructure package which is currently being planned by the administration.”
Concluding that “Neither gold’s utility as an inflation hedge nor as fiat currency insurance has actually been tarnished at all,” the analyst is clear that the bulls will be back in control. With these factors all at play, we’re effectively witnessing an incredible opportunity to buy for those who focus on the bigger picture. It’s clear that gold will resume its bull run – buy now to be in prime position to benefit when that happens.