Investors have turned increasingly bullish on gold with the spot price of 1 oz of the precious metal increasing nearly 7% to $1,497 in the past 30 days. According to a recent Bloomberg survey, 69% of gold traders and analysts are currently bullish on the metal with none bearish.
With gold prices at their highest level in 6 years, observers attribute the rising price and increased trading interest to the trade war between the US and China as well as slowing global economic growth. Gold is viewed as a non-government controlled safe haven in an environment in which $15 trillion of global debt has negative yields and China recently devalued its currency.
As Whitney George, president of a precious metals hedge fund told Bloomberg: “We’re now going from trade wars almost into currency wars. Gold is a currency, but it’s nobody’s obligation, so it will stand tallest when everyone else is trying to debase their currency to be competitive globally.”
Hedge funds are flocking to the gold trade in large numbers with their "net long" gold position surging 23% in the week ending August 6 to reach the highest level since July 2016. Meanwhile, Goldman, Citi and Bank of America Merrill Lynch analysts have all made bullish calls on gold's future with a near term rise by early next year to $1,600 possible and a longer term rise to $2,000 within 2 years.