Get ready for an intensified gold rush!
According to NewEdge Wealth’s Ben Emons, December tends to spark a greater appetite for the precious metal.
“Every December has shown strong performance for gold, especially following a stock market rally in November,” Emons, the company’s head of fixed income, told CNBC’s “Fast Money” on Tuesday.
Gold reached a new all-time high on Friday, closing the day nearly 2% higher at $2,089.70 per ounce.
Emons pointed to economic and geopolitical uncertainties as additional driving forces for gold’s upward trajectory.
“There’s uncertainty heading into next year with an upcoming election and the possibility of a recession,” Emons stated. “At the same time, gold tends to rally during market ‘risk-on’ periods when real interest rates are declining. This creates a positive environment for gold to breakout.”
In a note to clients, Emons emphasized the unusual combination of gold and stock market performance in recent months, attributing it to significant reduction cycles in the market values.
“This trend tends to occur during major reducing cycles in the market,” Emons wrote. “Given the current moderate reduction, all eyes are on the seasonals of gold.”
Emons predicts the strength of gold will persist into the following year.
“Central banks are once again favoring gold amid decreasing supply, potentially propelling the metal towards a significant breakthrough to $2100 … lifting underperforming sectors and positioning them for market dominance by early 2024,” Emons added.
“Fast Money” trader Guy Adami also sees potential for gold as he anticipates a decline in the dollar’s performance.
“If interest rates continue to drop, the dollar will also weaken, creating a favorable environment for gold,” he explained. “Gold is on the verge of a significant breakout to the upside.”
As of Friday’s close, gold has surged more than 14% so far this year. » …
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