BCA Research Shifts Stance, Recommends Accumulating Gold as Macro Factors Weaken
BCA Research has changed its stance on gold prices and now recommends that investors start accumulating it. The organization believes that the recent correction in gold prices may be coming to an end as macroeconomic factors that previously pressured the market are weakening.
The report suggests that the adverse effects of real interest rates on gold are likely behind us, and US real interest rates will remain stable in the coming months. This would help gold prices form a bottom.
According to Roukaya Ibrahim, Chief Commodity Strategist at BCA Research, investors should focus more on the evolution of real yields rather than just tracking inflation. The organization's buy recommendation is based on its assessment that real interest rates and the USD will not rise significantly higher than they are currently.
BCA Research also disagrees with the popular view that gold has always been an effective inflation hedge, stating that real interest rates, not inflation, are the determining factor in gold's performance.