(Kitco News) Gold is abandoning its usual drivers and is focusing solely on the U.S. dollar, with prices tumbling around $50 on the day at the start of May trading. But the “unloved” metal could surprise the markets with a $2,100 year-end price target as investors shift their asset allocations, Wells Fargo’s head of real asset strategy John LaForge told Kitco News.
The way gold behaved this year has surprised many investors, especially when the precious metal chose to ignore the risk-on/risk-off sentiment in the marketplace. LaForge described gold’s trading action as “the most confusing of all the commodities.”
His comments come as gold dropped around $50 on the day, with June Comex gold futures last trading at $1,862.60, down 2.57% on the day. “It doesn’t seem to want to react to anything outside the U.S. dollar and that’s been going on for a solid year and a half,” LaForge said.
“The bad news is bad news and the good news is bad news. It doesn’t seem to matter. Gold reached a point where people just don’t love it no matter what the fundamentals are. They’d rather go play and do other things. Bitcoin could be one of them. This period doesn’t have to last, but that’s where gold is today, which makes these things hard to explain.”