Florian Siegfried said mid-cycle corrections in gold tend to last up to four years. It has been more than three years now, probably 3.5 for the miners.
BASEL (Bullion Street): Gold has found a floor at $1280 an ounce which is encouraging for the short term. But a sideways trend may continue for a few weeks to six months, according to Florian Siegfried,head of precious metals and mining investments at Swiss firm AgaNola Ltd.
In an intervew to The Gold Report, he said that gold is rising against the US dollar and precious metals shares are largely outperforming the metal itself.
He said mid-cycle corrections in gold tend to last up to four years. It has been more than three years now, probably 3.5 for the miners.
"I wouldn't be surprised to see a sideways trend for the next six months, if we go by past cycles."
"If we see continuing weakness in equities and bonds, this rotation into precious metals will continue. But if we see heavy liquidation in stocks and rising yields in the junk bond market as liquidity evaporates, precious metal shares will not outperform gold because the sage money will primarily go into gold itself. As long as we remain in this rotation, I would expect shares to outperform the metal in the medium term."