Fear is on the rise and so is the price of gold.
FROM CNBC 6/10/16 IMHO FYI
Gold futures for August hit a three-week high Thursday, rising to $1,272.70 per ounce, just under a key resistance level of $1,275. The yellow metal is up about 20 percent year to date, and some high-profile investors — like George Soros and Stanley Druckenmiller — have made no secret that they see bad times ahead in the markets and gold is a safer bet.
"As far as the geopolitical element, it's certainly not a chicken little atmosphere," said Jim Steel, chief commodities analyst at HSBC. "I think there's enough uncertainty facing the global economy and even some geopolitical tensions to keep buying the gold market."
Investors believing they need to have gold in their portfolio as a hedge against the outcome of easy central bank policies and for other safety reasons are fueling a run in the metal. Some analysts say gold could easily climb above $1,300 an ounce.
In fact, DoubleLine Capital CEO Jeff Gundlach likes it, and he says gold could go to $1,400. Soros has reportedly been buying both gold and gold mining shares, while Drunkenmiller told investors last month to get out of stocks altogether and buy the yellow metal due to concerns about China's economy and the Fed's easy money policies.
Analysts say there are a host of reasons investors are loading up on gold, and at some point later this year, the U.S. presidential election could be seen as one of them.
"I think that the you've got 'Brexit' coming at you. You have a Spanish election coming at you in a week and a half and that is terribly confusing. It looks like the left is going to win. You have rising nationalism in France. You have the strike in France. You have one thing after another," said Dennis Gartman, publisher of The Gartman letter. Other worries include rising tensions with China in the South China Sea, and Nigeria where militants have shut down oil production.
Gold has also moved higher as the dollar pulled back, a phenomena helping other commodities. The greenback has weakened as the Fed's forecast for rate hikes was rolled back to two this year from four. The metal got a lift after last week's surprisingly weak May U.S. jobs report cast doubts on whether the central bank can raise rates at all this year.
