New analysis from BCA Research suggests the price action we have seen over the last month or so is just the beginning of a new red hot streak for gold. The firm’s latest gold outlook is overwhelmingly bullish, with analysts giving a host of reasons why this week’s record high is likely just the very tip of the iceberg.
They said, “Inflationary pressures this year will remain subdued as labour productivity growth – driven by strong capex and R+D spending – continues. This will make the Fed more confident in beginning its policy-rate-cutting cycle in June and will keep gold well bid.
“With supply chains mostly restored globally, we expect goods inflation to remain well-behaved for the balance of the year. Services inflation, however, likely will remain sticky owing to its higher labour content vs. manufacturing, and the relative insensitivity of services to energy-price effects. Rising productivity and immigration will lead to well-behaved inflation and falling interest rates. These will provide a bullish backdrop for gold, and the economy overall.”
BCA Research also expects the dollar to become weaker and Treasury yields to dip creating an even more favourable environment for gold. Don’t delay. Buy now.
