The record gold rush could intensify by the end of the year.
According to NewEdge Wealth’s Ben Emons, the last month of the year typically creates a greater appetite for the yellow metal.
“It was very consistent every December. “It’s been a pretty strong performance for gold – especially if there’s a stock market rally in November,” the firm’s head of fixed income told CNBC’s “Fast Money” on Tuesday.
The price of gold reached a new record high on Friday. It closed the day up nearly 2% at $2,089.70 an ounce.
Emons cited the economic and geopolitical background as further positive catalysts gold.
“Next year there is uncertainty. We have elections. We don’t know what will happen. We may get a recession, we may not,” Emons said. “At the same time, gold rallies when there is some risk appetite in the markets and then real interest rates and interest rates fall. That gives gold a really good impetus to break out.”
In a note to clients this week, Emons wrote that months are a “rare combination” for both gold and stocks. Gold gained 3% Dow And S&P 500 Both rose nearly 9% in November.
“[It] “The trend tends to occur when markets are pricing in large easing cycles,” he wrote. “Currently, this is occurring in a mild form, putting the spotlight on gold’s seasonal fluctuations.”
Emons expects the strength to continue next year.
“Central banks are again outbidding gold amid dwindling supply, likely setting the metal up for a major breakthrough heading into 2100…lifting the boats for laggards like.” Utilities “We have a chance to achieve market leadership by early 2024,” Emons also wrote.
“Fast Money” trader Guy Adami also sees gold because of the shine dollar‘s most recent appearance.
“If interest rates continue to fall, the dollar will fall. This will be a tailwind for gold,” he said. “Gold is about to make a huge breakout higher.”
As of Friday’s close, gold was up more than 14% so far this year.