El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
The spot gold price gained $38.30, or 2.7%, to $1,465 an ounce in New York on Thursday building on recent gains and retracing 50% of its dramatic fall just 10 days ago.
Gold suffered a $200-plus decline that began on Friday 13 April and accellerated into Monday when the metal dropped to multi-year lows of $1,326 an ounce.
Thursday’s push higher breached important technical levels around $1,440 an ounce and the 50% recovery of recent losses is also a bullish signal for the gold market.
Gold’s resurgence also comes after an unexpected upbeat view by a closely followed bullion market strategist.
Société Générale’s global strategist Albert Edwards says in a new report that he is sticking to his recent prediction that gold is on its way to $10,000.
The French investment and London bullion bank’s Global Strategy team’s forecast is also in stark contrast to that of its commodities researchers who predicted “The End of the Gold Era” and an end-2013 gold price of $1,375 per ounce. That call was made at the beginning of April when gold was trading above $1,550:
“We repeat our key forecasts of the S&P Composite to bottom around 450, accompanied by sub-1% US 10-year [bond] yields and gold above $10,000.”
Edwards’ new report acknowledges that forecast [of the SocGen commodities team], calling it “prescient” and a “rare exception” to the financial community’s usual tendency to stick with the consensus view.
“In that [same] vein,” writes SocGen’s global strategist – and with gold price 10% below the level when Patrick Legland and Michael Haigh’s report was issued – “holding gold is a bet against central banks’ competency.
“Given their track record, that’s certainly a bet I’d be happy to still take.”
RELATED: Goldman: Don’t get too greedy, close out your gold shorts
