Friday, June 28th 06:13 PM IST

Gold prices near bottom, set for recovery: Jason Cubitt,Ascenta

# gold  # mining  # equities  # US Fed  # stimulus  

He echoed the view of prominent analyst Leon Tuey that bullion markets would correct upwards soon. Gold mining companies are cuttng discretionary spending, reducing exploration spending, and suspending production of higher cost ounces. All of these factors signal a bottom for the yellow metal.

MAURITIUS (Bullion Street): Gold prices may have reached a bottom and is set fo recovery, according to Jason Cubitt, Managing Director, Fund Services at Ascenta Asset Management Ltd said in a note to investors.

He echoed the view of prominent analyst Leon Tuey that bullion markets would correct upwards soon. Gold mining companies are cuttng discretionary spending, reducing exploration spending, and suspending production of higher cost ounces. All of these factors signal a bottom for the yellow metal. 

"My belief is that Leon is right. We could soon see much higher bullion prices. What is my thinking on this? The bigger picture is that gold in economic amounts is getting harder and harder to find. Especially in politically stable jurisdictions with business friendly economies. Despite the weakness in recent months, gold still has the China tailwind, and is has another kicker: “trust”. Governments printing money and persistently higher debt levels have investors distrustful of paper money worldwide. In this environment we look for higher bullion prices," Jason Cubitt said.

Examining he causes of the bear run in gold, he pointed out selling pressure on Gold ETFs from April, weakening China economy, rising equities in North America and Europe. Competition from other asset classes such as equities and dollar on stimulus measures have also impacted gold market. Volatility will continue to be seen in global markets as investors guage whether earnings, and recent positive trends in US economy have been priced into share prices.

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