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Business Times
4 hours ago
- Business
- Business Times
Gold could test US$4,000 an ounce amid fiscal fears, escalating trade tensions: market watchers
[SINGAPORE] While gold has cemented itself above US$3,000 an ounce in 2025 amid trade uncertainty and US fiscal fears, a bullish forecast could see US$4,000 an ounce within a year's time, said market watchers. In Asian trading on Friday (Jun 6), spot gold was trading around US$3,371 an ounce as at 12.19 pm, up 29 per cent year to date. As the US' debt-to-GDP ratio has exceeded 120 per cent, a level unseen since World War II, investors are seeking a safe haven asset alternative to the greenback, noted Bank of Singapore's currency strategist Sim Moh Siong. He highlighted that the past glory of the US dollar as a safe currency has been eroded by the fiscal concerns, which will likely drive further decline in the greenback beyond the next six months. This is especially given the absence of any signal from Washington to address the fiscal deficit concern, on top of a sweeping budget bill that has now been presented to the US Senate. 'That 'big, beautiful bill' points to large fiscal deficits… that could continue to fuel concerns about fiscal sustainability, to the detriment of the US dollar,' said Sim, adding that gold's projection is tied to the US dollar's value in a historically inverse relationship. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Since last month, all three major credit ratings agencies have downgraded the US debt, which will pressure US dollar's value if foreign capital begins to question the reliability of US fiscal governance, wrote State Street Global Advisors in its gold mid-year outlook report released on Wednesday. 'The potential for trade wars has exacerbated these concerns,' the asset manager noted, adding that gold has stood out as a resilient store of value because it has no liability, does not depend on repayment, and does not require yield to justify its role in a portfolio. The asset manager added that the gold prices could test US$4,000 an ounce to US$5,000 an ounce over the next 12-24 months, while trading above US$3,000 an ounce for the rest of 2025. Uncertainty in the first half-year The early days of the US President Donal Trump administration in 2025 have corresponded with heightened US economic uncertainty, consumer anxiety and a weaker US dollar – which created a tailwind for gold, highlighted State Street Global Advisors. While gold prices have been climbing consistently, the market also experienced several dips during times of trade tension de-escalation and easing recession concerns, noted Bank of Singapore's Sim. These included a retreat from the all-time high US$3,500 an ounce in April. On the other hand, a worsening tariff situation would fuel the gold rush even more, pushing gold prices to touch US$4,000 within 2025, he added. This is despite a low likelihood after an amicable call between US President Trump and Chinese President Xi Jinping overnight that calmed investors' nerves. Firm gold prices in the second half-year Joshua Rotbart, managing director of Singapore-based bullion house J Rotbart & Co, expects gold to break its all-time high in the coming weeks, given the current geopolitical and fiscal uncertainties. 'However, we expect the pace of price appreciation to moderate, forecasting a 35 per cent year-over-year increase,' he noted. Such an increase represents a price trading around US$3,526 an ounce in 2025. State Street Global Advisors has increased the probability of a base case to 50 per cent, with gold to trade between US$3,100 and US$3,500 an ounce in 2025, on lingering risk sentiments on the back of greenback weakness and policy uncertainty, despite loosened tariffs. Bank of Singapore's Sim noted the bank's unchanged forecast on gold – which is to trade at US$3,500 per ounce in the coming six-month period and at US$3,900 within the next 12 months.
AU Financial Review
a day ago
- Business
- AU Financial Review
Gold tipped to hit $US4000 if greenback continues slide
The gold price could crack $US4000 per ounce this year, gifting miners the highest margins since the 1980s if the US dollar continues its slide. That's according to State Street Global Advisors gold strategy head Aakash Doshi who says high inflation and low growth in the world's largest economy, combined with so-called 'dedollarisation' – where countries reduce their reliance on the greenback – could drive bullion to fresh records.
Globe and Mail
2 days ago
- Business
- Globe and Mail
1 ETF to Buy Hand Over Fist to Follow the TACO Trade
In recent weeks, the phrase 'TACO' has been circulating in financial circles. No, investors are not talking about the Mexican delicacy. 'TACO' is actually an acronym for 'Trump Always Chickens Out,' a phrase coined by Financial Times columnist Robert Armstrong. According to Armstrong, many investors are using 'TACO' as a strategy. With the assumption that Trump will reverse course on tariffs (or 'chicken out'), they buy into the market each time new tariffs are announced. They are betting that stocks will rally if he later changes his stance on a particular levy. Utilizing this strategy, analysts at Sevens Report have made the case for a number of ETFs that can be an attractive trade for investors. One among them is the Consumer Discretionary Select Sector SPDR Fund (XLY). About the Consumer Discretionary Select Sector SPDR Fund Managed by State Street Global Advisors, the Consumer Discretionary Select Sector SPDR Fund (XLY) is an exchange-traded fund that offers investors exposure to U.S. consumer discretionary companies. These encompass industries such as retail, automobiles, media, hotels, restaurants, and leisure. The ETF is up 6.9% on a monthly basis while offering a dividend yield of 1.01% and charging an expense ratio of 0.08%, or $8 on an initial $10,000 investment. With assets under management (AUM) of $21.6 billion, XLY is the largest U.S.-listed ETF focused on the consumer discretionary sector. Its top five holdings are Amazon (AMZN), Tesla (TSLA), Home Depot (HD), Booking Holdings (BKNG), and McDonald's (MCD). Why the XLY ETF Fits in the TACO Trade But why are analysts at Sevens Report bullish about XLY? For starters, XLY stands out due to its significantly higher trading activity compared to peer ETFs like the Consumer Discretionary MSCI ETF (FDIS) and Vanguard's Consumer Discretionary ETF (VCR). This liquidity advantage makes XLY a more attractive option for traders. In general, the consumer discretionary sector has also shown strong momentum, recovering in late May after the U.S. and China announced a 90-day pause on most reciprocal tariffs. Finally, despite ongoing macroeconomic challenges, the latest reading of the U.S. Consumer Confidence Index from The Conference Board reached 98, a sharp increase from April's 85.7. This 12.3-point rise represents the largest monthly improvement since 2009 and ends a streak of five consecutive monthly declines. Moreover, the Present Situation Index advanced by 4.8 points to 135.9, signaling better evaluations of current business and labor market conditions. Such improvements are positive indicators for the consumer discretionary sector, as confident consumers are more likely to increase spending on non-essential items like retail goods, entertainment, travel, and dining experiences.
Yahoo
3 days ago
- Business
- Yahoo
Veteran strategist unveils updated gold price forecast
Veteran strategist unveils updated gold price forecast originally appeared on TheStreet. Nervous investors have flocked to gold as a safe haven against inflation, geopolitics, and, most recently, tariff turmoil, and they have been well-paid for their move this year. Now, those same investors are anxious about whether the precious metal's run can continue. Gold is up nearly 30% this year, after gaining more than 25% in 2024; it's up 44% over the last 12 months. The three-year annualized average return on gold, as measured by SPDR Gold Shares () , is 21.4%, well above its historic averages; from 1971 to 2024, the annualized return on the shiny stuff was just under 8%. Great runs like this don't last forever, so fearing a regression to the mean is normal. Calm the nerves; one of the world's leading gold strategists says record price levels will be broken regularly through the end of the Milling-Stanley, chief gold strategist for State Street Global Advisors, said in a recent interview on 'Money Life with Chuck Jaffe' that gold will continue to make sense for investors for its attributes and potential. 'We still have a lot of geopolitical turbulence, and gold historically has tended to perform well during periods of geopolitical turmoil,' said Milling-Stanley. Milling-Stanley has spent some five decades overseeing gold's fit into investment portfolios and helped develop GLD, the world's first gold-backed ETF. Clearly, he knows a thing or two about the yellow metal. 'We still don't know where we stand with interest rates. … We don't know what the outcome of that is going to be. We still have an enormous amount of uncertainty on the macroeconomic front, as well as geopolitical shock. 'When faced with uncertainty,' Milling-Stanley added, 'I've always turned to gold in the past and I think it's served me well.' Gold's run-up over the last few years has coincided with higher inflation, but that hasn't fueled the run, according to Milling-Stanley. He says it only serves the role of an inflation hedge when the economy is 'suffering sustained high inflation,' which he defines as two or more years when prices rise persistently by 5% or more. That hasn't happened since the 1970s, so even if price hikes continue at their current pace—higher than the Fed's 2% target—gold isn't likely to respond to the uncertainty that Milling-Stanley says gives gold more upside potential than downside risk. 'The higher the uncertainty, the higher the upper limit,' he explained, noting that emerging tariff policies and the pall they've cast on global markets have forced the team at State Street to revise forecasts made last December, intended to last the whole of 2025, several times already. 'I guess the most important thing to say is it looks very much as if we've established a new floor in the gold price, somewhere above $3,000 an ounce,' Milling-Stanley explained. 'The floor last year was at $2,000 an ounce. That is a huge leap. With a new floor in place—gold didn't sustain a breach of the $2,000 level until February 2024 but has been higher ever since—and with the huge gains in the last 12 months, Milling-Stanley said he would not be surprised or even disappointed if gold consolidated a bit, trading in the $3,000 to $3,500 range for a while, simply holding value if market turmoil causes other asset values to drop. But, he noted, 'our bullish case suggests that we could actually take out whatever resistance is available at the $3,500 area, and possibly even trade as high as $3,900.' By that best-case forecast, gold would gain more than 15% from current levels, on top of its huge gains of the last two years. While price performance has been glitzy, Milling-Stanley noted that a gold allocation makes sense in most portfolios for its non-glamorous, protective attributes:Diversification, thanks to 'a zero relationship' to the movement of both stocks and bonds. Protection from stock market calamity. Milling-Stanley isn't predicting disaster, but said that macroeconomic uncertainties make it impossible to eliminate the potential for something catastrophic. 'If you look at, Black Monday in 1987, if you look at the bursting of the bubble in 2001-2002, you look at the global financial crisis of 2008, you look at the advent of Covid in 2020, equities took a significant downturn and gold performed very, very well,' Milling-Stanley said. Milling-Stanley notes that gold's momentum hasn't carried over to gold miners; he favors owning the physical metal, particularly because of concerns about market swings. Miners historically have sharply underperformed metals in big downdrafts. Gold typically holds up against weakness in the dollar. The value of the dollar is off roughly 9% this year, and it lost about 4.5% in the wake of the Liberation Day tariff announcements. Inflation protection in the unlikely event that tariff policies hit home harder and longer than anticipated with the Fed losing control on price hikes. 'I think people are still looking to gold for its protective attributes, rather than necessarily hoping that the price will go up so they can sell at a profit tomorrow or next week,' Milling-Stanley said. Still, he acknowledged that those timeless attributes shine brighter when attached to gold's enhanced profit potential strategist unveils updated gold price forecast first appeared on TheStreet on Jun 3, 2025 This story was originally reported by TheStreet on Jun 3, 2025, where it first appeared.
Miami Herald
3 days ago
- Business
- Miami Herald
Veteran strategist unveils updated gold price forecast
Nervous investors have flocked to gold as a safe haven against inflation, geopolitics, and, most recently, tariff turmoil, and they have been well-paid for their move this year. Now, those same investors are anxious about whether the precious metal's run can continue. Gold is up nearly 30% this year, after gaining more than 25% in 2024; it's up 44% over the last 12 months. The three-year annualized average return on gold, as measured by SPDR Gold Shares (GLD) , is 21.4%, well above its historic averages; from 1971 to 2024, the annualized return on the shiny stuff was just under 8%. Great runs like this don't last forever, so fearing a regression to the mean is normal. Calm the nerves; one of the world's leading gold strategists says record price levels will be broken regularly through the end of the year. Related: Veteran analyst who predicted gold prices would rally offers a blunt new forecast George Milling-Stanley, chief gold strategist for State Street Global Advisors, said in a recent interview on "Money Life with Chuck Jaffe" that gold will continue to make sense for investors for its attributes and potential. "We still have a lot of geopolitical turbulence, and gold historically has tended to perform well during periods of geopolitical turmoil," said Milling-Stanley. Milling-Stanley has spent some five decades overseeing gold's fit into investment portfolios and helped develop GLD, the world's first gold-backed ETF. Clearly, he knows a thing or two about the yellow metal. "We still don't know where we stand with interest rates. … We don't know what the outcome of that is going to be. We still have an enormous amount of uncertainty on the macroeconomic front, as well as geopolitical shock. "When faced with uncertainty," Milling-Stanley added, "I've always turned to gold in the past and I think it's served me well." Gold's run-up over the last few years has coincided with higher inflation, but that hasn't fueled the run, according to Milling-Stanley. He says it only serves the role of an inflation hedge when the economy is "suffering sustained high inflation," which he defines as two or more years when prices rise persistently by 5% or more. That hasn't happened since the 1970s, so even if price hikes continue at their current pace-higher than the Fed's 2% target-gold isn't likely to respond to inflation. Related: Veteran fund manager sends surprising message on the weak dollar It's the uncertainty that Milling-Stanley says gives gold more upside potential than downside risk. "The higher the uncertainty, the higher the upper limit," he explained, noting that emerging tariff policies and the pall they've cast on global markets have forced the team at State Street to revise forecasts made last December, intended to last the whole of 2025, several times already. "I guess the most important thing to say is it looks very much as if we've established a new floor in the gold price, somewhere above $3,000 an ounce," Milling-Stanley explained. "The floor last year was at $2,000 an ounce. That is a huge leap. With a new floor in place-gold didn't sustain a breach of the $2,000 level until February 2024 but has been higher ever since-and with the huge gains in the last 12 months, Milling-Stanley said he would not be surprised or even disappointed if gold consolidated a bit, trading in the $3,000 to $3,500 range for a while, simply holding value if market turmoil causes other asset values to drop. But, he noted, "our bullish case suggests that we could actually take out whatever resistance is available at the $3,500 area, and possibly even trade as high as $3,900." By that best-case forecast, gold would gain more than 15% from current levels, on top of its huge gains of the last two years. While price performance has been glitzy, Milling-Stanley noted that a gold allocation makes sense in most portfolios for its non-glamorous, protective attributes: Related: Rich Dad Poor Dad author makes surprising silver, gold price forecast Diversification, thanks to "a zero relationship" to the movement of both stocks and from stock market calamity. Milling-Stanley isn't predicting disaster, but said that macroeconomic uncertainties make it impossible to eliminate the potential for something catastrophic. "If you look at, Black Monday in 1987, if you look at the bursting of the bubble in 2001-2002, you look at the global financial crisis of 2008, you look at the advent of Covid in 2020, equities took a significant downturn and gold performed very, very well," Milling-Stanley said. Milling-Stanley notes that gold's momentum hasn't carried over to gold miners; he favors owning the physical metal, particularly because of concerns about market swings. Miners historically have sharply underperformed metals in big downdrafts. Gold typically holds up against weakness in the dollar. The value of the dollar is off roughly 9% this year, and it lost about 4.5% in the wake of the Liberation Day tariff protection in the unlikely event that tariff policies hit home harder and longer than anticipated with the Fed losing control on price hikes. "I think people are still looking to gold for its protective attributes, rather than necessarily hoping that the price will go up so they can sell at a profit tomorrow or next week," Milling-Stanley said. Still, he acknowledged that those timeless attributes shine brighter when attached to gold's enhanced profit potential now. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
