Gold is looking to outperform silver into year-end, according to Bloomberg Intelligence, which is not ruling out $4,000 gold by 2023, noting that the gold bull rally is just beginning.
After breaking $2,000 an ounce level, gold has been stuck in a trading range between $1,930 and $1,980 an ounce. But despite the several-week hiatus from major price action, gold will still do better than silver in the second half of the year, said Bloomberg Intelligence senior commodity strategist Mike McGlone.
“The done-deal nature of continued central bank easing is a solid foundation for gold, but less so for silver and copper prices. Industrial metals are dependent on more fiscal stimulus and a global economic rebound, yet increasingly vulnerable to normal stock-market mean reversion,” wrote McGlone in the latest monthly commodity update.
For silver to outperform gold on a continuous basis for the rest of the year, the market will have to see a combination of rising bond yields, a peak dollar, declining stock-market volatility and continued global economic expansion. In Bloomberg Intelligence’s view, this scenario is unlikely.
“Gold should continue appreciating into year-end, notably vs. silver, copper and base metals, which are more at risk to a wobbly stock market and slack global economic growth, in our view,” McGlone said. “If stock prices decline, gold’s upper hand should accelerate as base metals come under pressure.”
Moreover, the gold’s bull rally is just beginning, noted the report. “Gold bottomed at about $700 in 2008 and peaked near $1,900 in 2011. A similar-velocity 2.7x advance from this year’s low-close near $1,470 points toward $4,000 by 2023,” McGlone explained.
The stock market will play a…
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