Gold News

Gold Prices set for 'seismic shift' upwards

A prominent figure at OmniSans Research has claimed today (May 29th) that Gold Prices could be on the verge of a major hike in the coming months.

Writing on, Graham Summers, senior market strategist at the firm, highlights the traditional inverse relationship between gold and the dollar.

Describing the greenback rally which started in July 2008 as "the mother of all short squeezes", he notes that it may now be about to head in the opposite direction.

He wrote: "With the Feds running the printing presses and inflationary concerns hitting the market, the dollar's rise may have come to an end.

"If the dollar breaks below 79 [on the Dollar Index] in a meaningful way, it's 'look out below' time. Which should put gold above $1,000 in a sustainable way."

Mr. Summers added that the move may already be happening and that a "truly seismic shift" between the dollar and Gold Prices could be about to commence.

Those comments were strongly backed up last week by Mitul Kotecha, the Hong Kong-based head of global foreign-exchange strategy at Calyon.

"There was always a risk that a Fed discussion about increasing Treasury purchases would play negatively for the US dollar given the four percent drop in the US dollar when the Fed initially announced its Treasury purchase program," he told Bloomberg.

"The US dollar bears are in the ascendancy and there is little to suggest a turnaround anytime soon."

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