(Kitco News) Even though the first leg of the gold bull market is over, investors should use these temporary lower prices as an “aggressive buying opportunity” before the second leg of the rally kicks in and takes the precious metal above $10,000 later this decade, said Goehring & Rozencwajg Associates managing partner Leigh Goehring.
After falling to 2-month lows this week, gold prices have more room to decline before resuming the second leg of its rally, Goehring told Kitco News on Tuesday.
“We believe gold could pull back as we progress through the fall. Gold looks to have peaked in the first leg of this gold bull market at $2,070, and it looks now to have rolled over. We wouldn’t be surprised if gold pulls back in the next three months to its 200-day moving average, which today sits at about $1,720,” he described.
At the time of writing, December Comex gold futures were trading at $1,869.30, down 2.01% on the day. Goehring highlighted a number of reasons why he foresees more weakness in the gold price this fall, including a chance of a successful presidential election, the introduction of a COVID-19 vaccine, and stagnation in the growth of the Federal Reserve’s balance sheet.
Everyone, according to the VIX, seems to be betting against a successful election but if that is not the case gold could see a negative impact, explained Goehring.