Gold and gold miners have risen sharply in the past two months as investors have begun to reflect the Fed's expectations for interest rate cuts. JPMorgan Chase and Barclays analysts believe it is time to make a profit.
Barclays analyst Maneesh Deshpande and his team believe that the price of gold is driven by two factors: fundamentals and speculation. Fundamentals are based on real interest rates and the direction of the dollar, while speculation is based on futures and gold ETF holdings, such as SPDR Gold Shares ETFs (GLDs).
Deshpande's report mentions that the current gold rally (gold futures rose 12%) is almost speculative. "The speculative flow does not have a consistent track of gold futures." He also advised investors on VanEck Vectors gold. Mining ETF (GDX US) sells the right to sell.
Shawn Quigg, an analyst at JPMorgan, has almost exactly the same view. He said, "Based on the current real rate of return in the United States and the net position of investors, JPMorgan Chase's trading strategist believes that the gold transaction price is over $ 50-60 per ounce than the fair price."
"The risk of gold has clearly risen, meaning that the Fed's outlook is worse than market expectations, which could lead to gold sales falling to $ 1,360 per ounce, while the VanEck Vectors mining ETF may fall to $ 26.30. "
He suggested buying the ETF Van Mining Mect Gold Gold Miners, with a strike price of $ 27.50 and expired on August 2nd.
SPDR Gold Shares ETF rose 0.33% to $ 134.98 on Tuesday; VanEck Vectors Gold Miners Gold Mining ETF rose 0.2% to $ 27.83 on the same day.
Some analysts have expressed their views on the previous day. They suggested that investors should buy gold before the Fed cuts interest rates Today, there are reports that it is time to sell the game. What is the answer? The Fed will cut interest rates tomorrow.