Gold Rally Coming

Be patient when it comes to gold, says one analyst, projecting a rally in the second quarter of 2018, led by strong physical demand and weaker US dollar, Kitco reported. “The resilience of gold prices in spite of the substantial wave of speculative selling since mid-March (71 tons, corresponding to a 17% drop in net long spec positions) is encouraging in so far as it suggests the presence of buying pressure elsewhere in the market (e.g. physical demand),” Boris Mikanikrezai, precious metals analyst at FastMarkets, wrote in a Seeking Alpha post. Mikanikrezai is very optimistic when it comes to gold price outlook for the near term. “ETF buying interest for gold is at its strongest since September 2017 … Once bullish speculative sentiment toward gold resumes, I expect a strong price reaction,” he said. “I have a long position in iShares Gold Trust, expecting a fresh 2018 high in Q2.” The macroeconomic backdrop, which triggered some sudden price moves within the precious metals market recently, has also been pro-gold. “I continue to see a weaker dollar and lower US real rates in the coming months on the back of three main drivers,” Mikanikrezai wrote.