In our regular gold trading alerts, we focus on the short- and medium-term outlook and we rarely discuss the very long-term issues or price targets. The reason is simple – the long-term issues and price targets don’t change often, so usually, there’s little new to say about them. Consequently, it’s been a long time since we last discussed our view on gold’s explosive upside potential. In fact, it’s been so long that those who do not take the time to read our analyses thoroughly and those who have been reading them for only a short while may think that we are bearish on gold in the long run. Or that we’re perma-bears.
Ten years ago, the market was fretting, everyone was worried about "peak oil,” and now the focus is on peak demand. Instead of the world on a collision course of fighting over the last drop of oil, now it seems that we have turned the world upside down and now we are seeing predictions that oil demand will peak. The latest peak demand forecast comes from BP, which is predicting that the demand for oil will peak before 2040.
Gold prices were little changed on Monday, buoyed by weaker-than-expected U.S. construction spending and manufacturing data that pushed the dollar index lower but pressured by an agreement that averted a government shutdown. U.S. Congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, averting a government shutdown and dampening demand for non-interest paying bullion.
A rally sparked by Donald Trump's win in the U.S. presidential election that powered the Dow to a record high sputtered on Friday as energy and healthcare stocks came under pressure. Investors scrambled to adjust their portfolios to benefit from Trump's plans to simplify regulation in the health and financial sectors and boost spending on infrastructure.
Gold stocks need very specific conditions in order to perform well. The last time most of these conditions were present was during the Great Depression. However, conditions are currently shaping up to be even more ideal.