FX168 Financial News (Hong Kong) - Although the gold market has been unable to maintain the momentum in October, a Canadian bank is not ready to give up gold.
According to the Metal Affairs Precious Metal Report of Scotiabank in November, analysts of Scotiabank believe that gold has further potential as a wave of risk aversion swept the financial market and inflationary pressure rose.
"The economic data is generally weak, including some US data. As the US trade dispute continues, economic leaders such as base metals are still under pressure," analysts said, "As other markets begin to become more risk averse, gold has become more favorable. Therefore, with the transfer of funds from the stock market and bond market, it seems that there is still room for safe haven demand for gold."
As he made these remarks, Gold price Continue to maintain above the key support level of $1220/oz. At the end of the US market on Monday (November 19), spot gold trading was near 1223.70 US dollars/ounce, which was basically flat on that day. At the same time, the stock market was hard to find momentum. The S&P 500 index closed at 2704, down nearly 1% on the day.
Analysts pointed out that, in addition to economic uncertainty, geopolitical instability surrounding global trade issues will continue to support inflation pressure, which may help gold prices continue to strengthen against the US dollar.
"Gold prices and the US dollar usually strengthened in October, so further strengthening of the US dollar may not pose too much resistance to gold prices, because gold prices are still at a generally low level," analysts said. "We said in October's Metal Issues Report that we may not be far from the turning point of gold prices - it may have happened now."
Analysts said that the new momentum of the gold market may also give silver Inject some vitality. Silver's performance has been weak for most of this year. According to Kitco.com, the gold/silver price ratio is close to a 25 year high, and the final trading price is 84.82.
Analysts pointed out that due to concerns about global economic growth and weak demand for industrial metals, silver prices have been falling. The latest trading price of silver futures in December was $14.385/ounce, almost unchanged on the day.
Analysts said: "If the gold price increases and investors' interest returns, silver may rebound more than gold in percentage terms, because silver has always been more volatile than gold."
