Ben Davies, CEO of Hinde Capital, spoke with King World News today and reiterated his view that gold is headed up, possibly to $2,000 an ounce by year end.
His reason? Davies believes the recent dip in gold was actually an early seasonal move, and the current rally — the commodity has added more than $130 since it hit bottom last month — will continue into the end of the year.
You really don’t need to say much when you look at the chart, it’s extremely bullish. We took the current year and pushed it forward four weeks to adjust the seasonality. We realised that the market was working on a four week basis ahead of time and if we adjusted the seasonality by bringing it forward four weeks, readers can see that come October we were going to actually have a rally into the year end. Historically you would tend to see a dip in October, but we already had that dip in September.
Davies thinks there are also some fundamental reasons to support another bullish move in gold:
This policy action in Europe is giving other countries the excuse to turn on the monetary spigots. Japan has increased their quantitive easing. The UK has done QE and even emerging markets such as Brazil and India are starting to move to cut rates. China, no doubt, is sitting with its own batch of non-performing loans within the banking system. They will also begin to cut rates. We expect all of this will continue to underpin the gold and silver markets.
Business Insider Emails & Alerts
Site highlights each day to your inbox.