ZYTrade Editor: Should you invest in ag, energies, base metals, or precious metals? If investing is about buying low and selling high, then it helps to know what’s trading at a steep discount relative to others.
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Gold price at ‘steep discount’ vs. crude oil: $2,000 gold will be breached
“Gold is re-starting its bull rally, with the precious metal currently trading at a ‘steep discount’ to crude oil, according to Bloomberg Intelligence.
The $2,000 gold price target is currently a resistance level, but it will be breached due to the U.S. employment situation, said Bloomberg Intelligence senior commodity strategist Mike McGlone.
‘Gold above $2,000, silver [at] $30 may not wait for June unemployment. Weaker-than-consensus April and May U.S. unemployment reports support our key takeaway that gold and silver are ripe to resume their bull markets,’ McGlone said in a note. ‘Things may never be the same due to more flexible work schedules. About $2,000 is key gold resistance, which we expect to eventually be breached.’
From a technical perspective, gold’s current price levels are ‘at an unsustainably steep discount to its more enduring upward trajectory vs. crude oil.’ The gold-to-crude ratio will be favoring the precious metal, McGlone pointed out.”
Originally posted on Bloomberg/Kitco
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