JPMorgan Predicts New and 'Long' Gold Rally
By GCRU Gold News on Thursday, May 19 2016, 03:15 - Permalink
Even though gold is up 20% so far this year, one major bank says this is only the beginning of what it expects to be a “new and very long bull market.”
“After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that's just the start of the next leg higher,” said Marcelli. “$1,400 is very much in the cards this year.”
Marcelli said that because of the trend to negative real and nominal interest rates, “Gold is looking more and more attractive every single day. As a non-yielding asset, it has a minimal storage cost, so when you compare it to negative-yielding assets, it actually has a positive carry…Gold is a great portfolio hedge in an environment where world government bonds are yielding at historically low levels.”
Marcelli stated that ultimately gold could wind up actually replacing sovereign bonds, long considered the safest of safe places for wealth, as the preferred safe haven for investors.