Defensive investor to advance the gold – analyst

(Kitco News) – There is a lot of risk on the horizon and investors will be hedging against this uncertainty, driving up gold prices over the next few months, according to a longtime bull of gold.

"Gold's positioning in speculation shows that market players have a lot of dry powder to extend their long net position," said Boris Mikanikrezai, a precious metals badyst at Metal Bulletin, in an article published in Seeking Alpha, Sunday. .

Gold has been shown very resilient so far this year and has performed well despite a stock-risk rally, noted Mikanikrezai.

"Macro investors are aware that the risk recovery since the beginning of the year is unlikely to be sustainable due to a number of macro / political / macro clouds. geopolitics on the horizon, "said the badyst. "This explains why the recent upturn in US stocks is accompanied by exits rather than inflows."

The spot gold price was $ 1,314.20, gaining 2% in the last 30 days and 8.4% in the last six months.

The increased demand for ETFs partly explains the impressive price gains, explained Mikanikrezai.

"ETF investors have added significant long positions to their gold holdings in January, for a second consecutive month," he said. "Gold ETF holdings have risen 57 tonnes or 3% since the beginning of the year to reach about 2,187 tonnes on February 1, according to Fastmarkets."

During the year, investors risk becoming even more defensive with the positioning of their portfolio, added the badyst.

"The speculative community has a lot of dry powder to extend its long net position on Comex's gold in the coming months," he wrote. "[And] The increase in speculative demand for gold Comex will result in an increase in cash prices of gold Comex in the short and medium term. "