The sharp pullback since last week is not deterring gold buyers whatsoever and we’re already seeing that in the price action over the past two days. The recovery is looking solid and we’re now approaching a decisive moment on the charts for the precious metal as outlined here.
As the parabolic surge higher cools and price settles down a bit, Deutsche Bank is arguing that the outlook remains very much bullish for gold this year. They outline three key reasons for that conviction:
- “We argue that the adjustment in precious metal prices overshot the significance of its ostensible catalysts. Moreover, investor intentions in precious (official, institutional, individual) have not likely changed for the worse as of yet.”
- “Gold’s thematic drivers remain positive and we believe investors’ rationale for gold (and precious) allocations will not have changed.”
- “We see signs that China has been a prominent driver of precious metal investment flows. Thus, the rise in SGE premiums late last week is an important sign of amplified buying interest in gold.”
In that lieu, the firm argues that:
“Together these suggest the rationale for a positive outlook has not changed from that described last week. We reiterate our gold USD 6,000/oz target.”
This article was written by Justin Low at investinglive.com.