The price of gold seems to be rising steadily after bottoming out recently. Price targets of between $2,000 and $2,500 are entirely feasible, with the possibility of reaching $3,000 in December a possibility that cannot be ruled out.
There are a few factors to consider that once again underline gold’s status as the king of hedge and safe-haven assets. From the collapse of Bitcoin and the high-risk crypto-currency market to falling yields in the US due to the posed $6 trillion budget, gold could once again be in high demand.
Having recently hit its all-time high of $2,075, there is still enough price movement for it to break through and develop a small spike, which is what Kim Chua, analyst at PrimeXBT, expects.
After hitting a double bottom at $1,680, the gold price has steadily risen in a channel, with potential to reach $1,930 before a short consolidation.
With US yields falling and Biden’s new $6 trillion budget for 2022, the backdrop is solid for gold to move higher in the second half of this year, with a good chance of surpassing its all-time high of $2,075.
The recent decline in the BTC also favours gold, with some conservative investors believing that the BTC’s volatility is too great to return to gold. Gold will thus regain its status as the best store of value and hedge against inflation.
Some central banks have resumed accumulating gold after a lull since August last year.
The weekly gold chart has already broken out of its 8-month consolidation and is poised to rise by $700-$1000 over the next 6 months. I expect the gold price to reach $2,500 to $3,000 by the end of the year on the back of this breakout.
Kim Chua is an institutional trader with a proven track record at major banks including Deutsche Bank and China Merchants Bank.
Chua went on to launch a hedge fund that delivered triple-digit returns for seven years. Chua is also an educator at heart, having developed her own trading programme to pass on her knowledge to a new generation of analysts.
Kim Chua actively and closely follows both the traditional and crypto-currency markets and is eager to find future investment and trading opportunities as these two very different asset classes begin to converge.
