Ann: High Grades Continue at Fingals Fortune, page-6

Goldprice to 'revisit its peak' soon, says Bloomberg Intelligence

Anna Golubova MondayOctober 04, 2021 16:54

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(***** News) After reaching new all-timehighs over a year ago, gold is bound to climb back to its peak soon, saidBloomberg Intelligence in its October price outlook.

"It's only been about a year since gold's last peak, and we believeit should be a relatively short matter of time to revisit," said BloombergIntelligence senior commodity strategist Mike McGlone. "Gold hasoutperformed most major commodities in the past 20 years."

Gold's new all-time high stands above $2,060 an ounce, which was hitback in August 2020. At the time of writing, December Comex gold futures were tradingat $1,769.30, up 0.62% on the day.

Despite this year's failure to launch, gold is still in an enduring bullmarket, McGlone pointed out.

"Gold, like Treasury prices, has an enduring bull market in itsfavor, and a correction within that trend improves its relative value," hesaid. "Gold appears too cold approaching the start of 4Q … Risks tilttoward a continuation of September's stock-market volatility, which shouldfavor gold in 4Q."

The question McGlone asked in his October outlook is whether gold hasreached its maximum disdain? This seems to be the psychological marker it needsto breach before resuming its rally.

So far, the yellow metal has been having a disappointing year, failingto attract new buyers despite inflation fears and debt worries. Year-to-date,gold is down more than 7% after selling off at the $1,800 an ounce levelmultiple times.

The main obstacle for gold has been a strong U.S. stock market,according to McGlone.

"The metal's nemesis -- the U.S. stock market -- hasn't had ameaningful pullback since the 2020 low. If equities are entering a moresustained wobbling period, we see gold, Treasury bonds and Bitcoin as topcontenders for outperformance," he wrote. "It's a question of whethergold has reached a level of maximum disdain, which is probably close."

Industrial metals, on the other hand, are unluckily to cover unless thestock market does.

"We believe industrial metals have little chance of appreciating. Astrengthening dollar and weakening China typically aren't good for copper. Rareamong metals, gold prices seem too cold," McGlone noted. Several thingsare working against industrial metals: copper peaking just above $10,000 a tonin May, China cutting its required reserve ratio in July and issues withEvergrande coming to the forefront in September. Risks tilt toward morereversion in 4Q."

By Anna Golubova

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