Precious metals prices are slipping today, with gold and the SPDR Gold Shares (GLD) trading moderately lower Thursday, while silver prices are tumbling. Both metals have had a meteoric rise recently. But there could be significantly more upside for gold according to analysts.
According to Kitco analyst Jim Wyckoff, “These are normal corrective price pullbacks in still-strong uptrends on the charts. Once again, look for bulls to step in to buy the dips and do some bargain hunting.”
Gold is consolidating around $1,950 an ounce with prices appearing ready to test their new record highs and head higher, according to Commerzbank. “Yesterday evening it made an unsuccessful bid to regain its record high from the start of the week. It is likely to give it another go,” says Commerzbank analyst Carsten Fritsch.
Comments from the Federal Reserve on Wednesday following the decision to hold rates steady is bullish for gold Fritsch notes. “As its Chairman Powell put it, the Fed ‘is not even thinking about to think about to think about’ raising rates. This makes it clear how long it will be until rates are hiked …Thus the Fed will remain in demand to combat the crisis, and the ultra-loose monetary policy will not change in the foreseeable future. All of this suggests that the gold price will continue to rise.”
Gold prices have hit all-time highs recently, but industry pundits Jim Rickards, best-selling author, and Peter Schiff, CEO of Euro Pacific Capital, both think that the rally also has further to go.
Rickards’ analysis points the gold price to $15,000 by 2025.
“I would put [gold at $15,000 an ounce before 2025,” Rickards told Kitco News. “If you just take the average of the prior bull markets: 1971 to 1980, nine years, 2200%, 1999 to 2011, a twelve-year bull market, about 700%. Just take the average, you don’t have to go to the higher of the two or extrapolate, if you just take the average of the two you would say the next bull market is going to be a little over 10 years and it’s going to go up 1500%,” he said.
Although the rapid spike in the precious metal could certainly warrant a pullback, ETF investors can get gold exposure via miners ETFs which are rallying strongly Monday using the following funds:
- VanEck Vectors Gold Miners (NYSEArca: GDX): seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE® Arca Gold Miners Index®. The index is a modified market-capitalization weighted index primarily comprised of publicly traded companies involved in the mining for gold and silver.
- Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG): seeks daily investment results, before fees and expenses, of 200% of the daily performance of the MVIS Global Junior Gold Miners Index. The index includes companies from markets that are freely investable to foreign investors, including “emerging markets,” as that term is defined by the index provider.
- Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT) : seeks daily investment results, before fees and expenses, of 200% of the daily performance of the NYSE Arca Gold Miners Index. The fund invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index is comprised of publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in the mining for gold and, in mining for silver.
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