Gold prices should still hit $2,000 this year, but can silver keep up?
Gold prices were down slightly on Wednesday, but in the medium-term, fundamentals should still push prices towards the $2,000 an ounce level, this according to Bill Baruch, president of Blue Line Futures.
“I think gold will see $2,000 this year, I think once we get above $1,800 it will be a quick move to $1,900,” Baruch told Kitco News.
Baruch noted that silver’s technical indicators are not pointing to an immediate bull rally.
“When silver is above the 50-day moving average, it really likes to stay above it, and when it’s below it, it really likes to stay below it. Right now, it’s struggling to get above that $16.10, $16.50 [level],” he said. “Right now, silver is really holding back gold, but it’s really the broader risk environment. Today’s a risk-off day. We’re seeing the metals come in with the equities market.”
Gold prices pulled back 0.4% on Wednesday while silver declined by 2%. Stocks also traded lower, with the S&P 500 down 2.2% on the session.
On the equities markets recovering in April, Baruch said that much of the gains has been due to monetary easing from the Federal Reserve.
“Ultimately, don’t make a mistake here, this is fed liquidity stabilizing the market,” he said. “But the reality is about to hit us. We’re starting to see some of the poor data, we’re going into the earnings, and it’s not too much of a surprise to see this exhaustion on this move start to play out today.”
By Kitco News
David