Gold can breach the £1,621 ($2,000) marker but commodities face a wild ride through the end of the year, according to new insight from Bloomberg Intelligence.
In his new May outlook, senior commodity strategist Mike McGlone said, “Commodities are at increasing risk this year of a wild ride akin to 2008, a development that may shine on gold. Commodities climbed 50% in the past 10 years and the Producer Price Index is up 30%. Gains are likely to recede as the world faces a potential recession and the Fed tightens the reins … Rate hikes should coincide with peak inflation.
While McGlone says the price of oil is likely to fall sharply, and natural gas continues to face supply issues but gold is on track to thrive in the current marketplace. “Federal Reserve jawboning amid global GDP downgrades and a declining stock market isn’t good for prices of copper and other industrial metals, and the endgame appears tilted favourably to gold. When fed funds futures start anticipating a rate-hike cycle end, the precious metal should breach £1,621 ($2,000)- an-ounce resistance.
