Gold Prices May Have Finally Bottomed Out

12:47 10/10/2018

Gold may have found its bottom. After plunging for the last six months, prices were in the longest streak of losses in about 30 years. Just since April 2018, gold prices sank from $1,360 to a current price of $1,180. And while there are those that would tell you, there’s more pain ahead, we’re not so sure. There are plenty of fundamental arguments. Global central banks have seen the opportunity unfold for example. Over the first six months of 2018, central banks added 193.3 metric tons to their reserves. That’s up 8% year over year, according to the World Gold Council. That’s also the strongest central bank purchase in the first half of a year since 2015. “I do believe gold has either reached a floor or is pretty close to one,” says Jeff Wright, executive vice president of mineral exploration company Gold Mining noting that central bank gold reserve purchases were the strongest in three years, notes Barron’s. Recent consolidation may suggest a bottom, as well. For example, Randgold Resources and Barrick Gold will merge in an $18.3 billion deal. “Consolidation at this level has historically been a sign that we’re nearing a bottom,” says Frank Holmes, CEO and CIO at U.S. Global Investors, as quoted by MarketWatch.

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