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| ‘Relatively cheap’ gold may have great upside potential – analyst | ‘Relatively cheap’ gold may have great upside potential – analyst |
| (4 months later) | |
| Gold has become a relatively cheap investment opportunity which may continue rising in price, even after exceeding $1,900 per ounce, according to Richard Kelly, head of global strategy at TD Securities. | Gold has become a relatively cheap investment opportunity which may continue rising in price, even after exceeding $1,900 per ounce, according to Richard Kelly, head of global strategy at TD Securities. |
| “Gold is relatively cheap, so when you’re trying to think about that positioning, gold is definitely one that still has catch-up potential,” the strategist said, as quoted by CNBC. | “Gold is relatively cheap, so when you’re trying to think about that positioning, gold is definitely one that still has catch-up potential,” the strategist said, as quoted by CNBC. |
| He added that “gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.” | He added that “gold had a phenomenal run-up over the course of last year, and when that reversed, I think it scared a few investors off.” |
| Last August, spot gold price reached a record high of $2,063 per troy ounce. The current price of the precious metal stands around $1,887. | Last August, spot gold price reached a record high of $2,063 per troy ounce. The current price of the precious metal stands around $1,887. |
| A sharp jump in US Treasury yields, along with an anticipated interest-rate hike, put gold bullion under pressure in the first few months of 2021. | A sharp jump in US Treasury yields, along with an anticipated interest-rate hike, put gold bullion under pressure in the first few months of 2021. |
| According to the analyst, the dollar and other major currencies like the euro were now looking “rich” on a relative basis, suggesting a possible dip against the price of gold. | According to the analyst, the dollar and other major currencies like the euro were now looking “rich” on a relative basis, suggesting a possible dip against the price of gold. |
| He added that even if gold were to reach $1,900, “or even above, that’s still an area that does have scope given what we’re seeing with policy rates, given what we’re seeing with inflation dynamics and just overall under-positioning on that side of things. That’s certainly a catch-up trade that can have more legs.” | He added that even if gold were to reach $1,900, “or even above, that’s still an area that does have scope given what we’re seeing with policy rates, given what we’re seeing with inflation dynamics and just overall under-positioning on that side of things. That’s certainly a catch-up trade that can have more legs.” |
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