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With gold prices up nearly ten percent over the past month, analysts are once again hailing the start of a bull market for the yellow metal.
With gold prices up nearly ten percent over the past month, analysts are once again hailing the start of a bull market for the yellow metal.
Prices are up over 27 percent year-to-date, with gold trading at $1,363 per ounce on Wednesday. VanEck gold and precious metals strategist Joe Foster told CNBC that post-Brexit, investors are increasingly risk averse, which is helping push gold to the start of a new bull market.
“Gold thrives on financial risk. When people look for a store of value, a currency hedge, a way to protect their wealth, they go to gold,” he said.
UBS is also bullish on the yellow metal. “Gold has likely entered the early stages of the next bull run,” stated UBS analyst Joni Teves, as cited by Bloomberg. “This trend should now deepen, attracting more participants and encouraging those who have been hesitating to get more involved.”
UBS has raised its short term price target from $1,250 to $1,400 per ounce.
On the back of that positive price action, gold mining stocks are up as well. The Market Vectors Gold Miners ETF (NYSEARCA:GDX) has gained 20 percent in the past month, while the Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) has gained 26 percent.
Market watchers started to talk about gold entering a bull market back in May, with JP Morgan telling its clients to get ready for a “new and very long bull market for gold”.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
