Expect Gold to Rise Past Its Record High: Strategist

Gold (GC=F) is rising to a record high as investors turn to the precious metal amid macro uncertainty. Phil Streible, chief market strategist at Blue Line Futures, joins Seana Smith and Madison Mills in the Morning Brief to explain why he expects gold to continue its rally.

Streible says the main drivers behind the rise in gold prices are “falling inflation expectations” and “the rotation of assets that tend to do well with a more dovish Fed.” He explains: “As inflation expectations come down and we start to price in more of these rate cuts, you will see the bond market start to push higher. And we have seen inflationary pressures. That was the case.” Reliefd by falling energy prices. So the US Federal Reserve is more focused on the fragile labor market. We believe that gold futures will benefit from the dollar.

The upcoming US presidential election is expected to increase market volatility, especially if the results are delayed. The strategist is less concerned with this volatility having a direct impact on gold and more concerned with investors looking for security. He emphasizes that currency weakness is a key driver as central banks increase spending on precious metals. “It seems like geopolitical tensions are at one of the highest levels that I've seen in the last 20 years, and I think that's a reason to reduce some of that currency exposure (and) add more of those precious metals to those reserves hold.” “

For more expert insights and analysis on the latest market activity, read the Morning Brief here.

This post was written by Naomi Buchanan.