Gold has been in a 3-year bear market, which has seen failed rallies on the back of various news events. Continued strength in the US economy and labor market has offset political and economic events since the Gold market turned bearish in 2013.
The good news is that UBS sees the worst of gold’s woes as having passed.
“While gold price should come under pressure again, we reiterate our view that the structural decline in gold prices is over. Negative real U.S. rates, newfound investment demand, and central bank purchases are supportive of gold at around $ 1,200 an ounce over six to 12 months, in our view. Falling mine supply is another supportive element, although higher gold prices should increase scrap supplies and might raise the prospect of availability over and above our expectations,” according to the note posted on CNBC.com.
SPDR Gold Shares
Tom Lydon’s clients own shares of GLD.