The gold price started the second half of the year with a drop below $1,800. Even so, Bloomberg Intelligence predicts the bright metal will move higher against the broader commodities that are at risk of a reversal.
“Gold price may see $2,000 again”
Known for his accurate forecasts, Bloomberg Intelligence senior commodity strategist Mike McGlone shared his latest forecasts. McGlone’s successful predictions cryptocoin.com You can take a look at this article. According to the analyst, crude oil is the commodity that faces the greatest risk of reversal in the second half of 2022. However, the analyst says that gold is among the few commodities that can benefit. He also notes that it is possible for the yellow metal to see $2,000 again. In his mid-year outlook, McGlone comments:
The big comeback of 2022 could pick up momentum in the second half. Crude oil looks like the best candidate for the decline. We see second-half risks tend to accelerate the pullback in the Bloomberg Commodity Index. In this environment, gold stands out as potential.
Mike McGlone: Ready on the gold train!
Bloomberg Intelligence looks at whether gold is too cold while commodities get too hot in the first half of the year. And after looking at all the data, McGlone notes that gold is trending as the rest of the commodities market slides down from their highs. According to the analyst, gold’s moribund performance is clearly different from past high-speed commodity rallies. Based on this, McGlone makes the following statement:
But the shiny metal looks ready to stand out. Standing side by side on the chart, gold has been hovering around its 100-week average for almost a year. Our approach: Gold is trending, broad commodities are at risk of returning to their historical averages. The last similar period of stagnant gold against strong commodities was in 2000, when the internet bubble burst and the precious metal jumped into a long bull market.
“It is possible for gold to shine against industrial metals”
Gold is likely to shine against industrial metals for the remainder of 2022 as global growth declines. McGlone says gold is more likely to exceed $2,000. From a macro perspective, Bloomberg Intelligence expects the stock market to continue to decline. It also predicts inflation will slow later this year as commodities including oil and industrial metals fall.
However, Bloomberg Intelligence predicts a transition to deflation in the commodity space by the end of 2022. The baseline for the second half of 2022 is for commodities and equities to go deep enough for the Federal Reserve to start minimizing rate hikes. This is necessary for the price of gold and for US Treasuries to start outperforming. Also, according to the outlook, Bitcoin is also likely to start reflecting gold more.
