If Gold Pulls Back, It Will Most Likely “Be Short and Shallow” – GoldCore

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by GoldCore

GoldCore Note

Gold prices surged to a new six-year high today after markets digested the U.S. Federal Reserve signalling a move to looser policies and other central banks including the ECB made similar dovish signals.

The Fed said it was ready to cut interest rates as soon as this July due to the very uncertain outlook and the slowing U.S. economy. This led to a sharp fall in the dollar and gold gaining 4% and breaking above the key $1,400 price level.

The economic recovery in the U.S. looks very ‘long in the tooth’ and the move to looser monetary policies by the Fed will further impact the dollar and should see higher gold prices in the coming months.

The very uncertain situation in the Middle East and the real risk of a military confrontation between the U.S. and Iran saw oil prices surge 6%. This will also support gold and means that any pullback will likely be short and shallow.

We are seeing a new sense of urgency from investors in recent days and an increase in safe haven buying due to concerns about the geopolitical and economic outlook.

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