Monday, 8 October 2018 20:56 WIB |
GOLD CORNER |Gold OutlookGold Corner
Gold should face headwinds in the near-term future, but a few years out, over-tightening by the Fed could send the economy into a recession and push gold prices up substantially, this according to Erik Norland, Executive Director and Senior Economist of CME Group.
'We have a vast expansion in deficits in the United States, and if the Fed over-tightens and were to put the economy into a recession and then have to cut rates back, we could see a tremendous, tremendous bull rally in gold,' Norland told Kitco News.
Norland noted that this scenario may not materialize for a while.
œAt the moment, that™s not in the cards for the next few months, Norland said.
Gold has a very strong negative correlation with the dollar, and investors should be trading gold like a currency, he said.
œI think that you really have to look at gold here as a currency that™s trending with the euro, the pound, the renminbi, and other currencies versus the U.S. dollar, Norland said.