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Currency Specialist Says Gold Surge Will Continue

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No one can predict the future.  The best we can do, which almost inevitably gives us a leg up – and maybe even the impression we’re psychic – is to pay close attention to the present and the past.  If we’re sharp enough to read the facts on the ground, and use the past as a gauge, we stand a better-than-average chance of making some pretty smart predictions.

That’s precisely why on Monday Benjamin Wong of DBS Group Holdings, Ltd. forecast to Bloomberg that gold will soon shoot up over $1,500 an ounce. Wong, the Singapore-based bank’s foreign exchange strategist, points out, “Gold has seen four major bull markets since 1970: this is another one….The market has yet to deal with the political uncertainty going into the Nov. 8 presidential election.”

Historically, while markets freak out during periods of uncertainty, the yellow metal thrives; offering a safe haven to those shrewd enough to seek it. Sporadic activity in international stocks, the proliferation of negative interest rates, and the anxiety brought on by Brexit have all helped catapult gold to a June intraday high of $1,375—with a bull market in uncertainty yet to come.

Last October DBS pointed out the possibility for gold to move up, when it predicted the Fed would raise interest rates only gradually. Then in February, the firm issued another positive statement on the precious metal.  In the ensuing almost six months, while we’ve had moments of market recovery, the mid- to long-term outlook has darkened considerably.

As U.S. voters now struggle with their most agonizing choice for president in decades, a long-needed interest rate raise appears unlikely at least through November. Last week, Bank of America Merrill Lynch also cited the U.S. presidential election as a reason gold might soon top fifteen hundred dollars an ounce.

On Monday Wong pointed to a technical pattern in gold’s upward movement as verification of the political uncertainty now driving the shiny metal. Francisco Blanch, head of commodities research at Bank of America Merrill Lynch, concurs, saying in an interview with Bloomberg Television Canada, “The next few weeks, as the political debate heats up in the U.S., the support for gold is going to increase.”

Gold surge

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