(Kitco News) – The ramping up of “Cold War 2.0” between China, Russia, Iran, and North Korea against the United States and its allies is a big reason why gold will likely outperform the broader metals complex in the second half of 2024, but there are plenty of other indicators which also support this view, according to Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence.
“That copper made a new high in 1H and crude oil didn’t may show the tilt of the metal outperforming the fossil fuel in the longer term,” McGlone wrote in his Midyear Metals Outlook on Tuesday. “Yet gold appears to have the upper hand vs. most commodities in 2H.
If the US stock market can stay on a tear – the S&P 500 total return is about 16% in 1H to June 24 – base metals should remain buoyant. Risks of some normal reversion in beta appear elevated, with tailwind implications for gold.”
He added that China’s property crisis and growing resistance to its exports are showing in the country’s 10-year yield falling to 2.25%, its lowest level since 2006. “The “unlimited friendship” between the leaders of Russia and China may have shifted the global order, with gold in the middle,” he said. “We see the precious metal continuing to advance in 2H.”
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