Last week is undoubtedly the best trading week for gold. It rallied more than $ 70 right after breaking through $ 1,800. The drivers for the sharp growth were the weaker-than-expected US employment data, decline in dollar demand and decrease in US Treasury yields.
Seeing this upturn, many became curious on what will happen next to the yellow metal. Many say it will continue to soar in the market, especially amid rising inflation, which fuels a risk-free gold trading.
The Bank of America even believes that gold's unprecedented rise is only the beginning, and that it will see much larger gains in the coming months.
The bank also projects copper to hit $ 20,000, mainly due to a significant decrease in supply and continued growth in demand. And assuming that copper reserves will deplete over the next three years, volatility will rise, which will push the metal's price above $ 20,000.
Going back to gold, demand surged when the US released very weak employment reports. According to the data, only 266,000 jobs were created last April, which is much lower than predicted. Then, disappointment doubled when the data for March was revised from 916,000 to 770,000.
Of course, the US economy is still recovering, but the pace is not as vigorous as expected. Bob Haberkorn, a senior broker at RJO Futures, said the difficulty lies in hiring people. This means that the Fed has no choice but to maintain a soft monetary policy, at least until the US reaches maximum employment.