Sweet Spot for Gold’s Fundamentals

Jan 28 06:01 2020 Print This Article

Gold cannot lose this year.

Let me explain.

The most bearish points for Gold (aside from a blowoff in inflation) are when an economic recovery gains traction or when the Fed raises rates to combat inflation. All three scenarios entail stable or rising real interest rates and, therefore, no investment demand for Gold.

At present, the Fed is seeking higher inflation while trying to keep the economy from falling into a recession. Do not expect higher real interest rates anytime soon.

Hence, Gold has held its summer gains quite well and even built on them.

Moreover, unlike any other time in Gold’s history, it is performing well despite strength in the US Dollar, which has perked up in recent weeks. 

My Gold against foreign currencies basket (or Gold multiplied by the US Dollar Index) closed last week at a new all-time high. It is trading 7% above its 2011 high! 

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About Article Author

Daily Gold

Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for precious metals investors. The Daily Gold was recently anmed one of the top 50 Investment Blogs by DailyReckoning and WalletHub

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