Gold's rally underpinned, via Bloomberg
Gold has further to go for the following reason. There is more stimulus to come. The increase in COVID-19 cases globally, especially in the US, mean that the Fed is likely to ease more which will suit gold upside. Here are three reasons to support gold's upside:
1. Fed officials have warned that the US outlook is getting worse and easing is the answer. Chicago Fed Chief said, 'i'm worried about the downside risks and I think that's how policy needs to be positioned'. John Williams and Raphael Bostic also gave additional signals.
2. The Bank of England is expected to add more stimulus to the UK economy as it is stuck with Brexit and COVID-19 struggles. Economists at Goldman Sachs think that the bank could signal in August that rates could turn negative.
3. Thirdly, Jean-Sebastian Jacques, head of diversified miner Rio Tinto and an executive keyed in with the heartbeat of the global economy says: 'the uncertainty in the marketplace is because there is no doubt -it's a question of when - we will have a second wave of COVID-19.
So, gold has taken out $1800 and $2000 is not looking impossible by year end. With some US jobs support ending in July and the furlough scheme in the UK running out in October we can expect more easing to come unless a radical treatment changes the outlook. See here for a relative simple, but possibly effective, protein treatment from the UK normally used for MS patients.
