Defying Bearish Factors, Gold Hits New Highs: Best Time for Bull Market?

The head of commodities research at Citi has stated that gold and silver have rebounded and have more room to rise.

According to an analysis by Max Layton, head of commodities research at Citi, the current global market has created the most favorable environment for gold and silver to rise in a decade.

He pointed out that the best bull market for gold and silver often occurs when the markets in the United States and Europe are weak, and China seems to be about to strengthen.

At present, the slowdown in the Western economy, coupled with China's economic stimulus measures, which may drive growth, lays the foundation for the strength of precious metals.

"I am optimistic about the trend of gold and silver in the next few months," Layton said in a recent interview with CNBC. He explained that the best bull markets for gold and silver in the past 20 years have occurred when developed markets are weak or weakening, and China is easing and may be strengthening.

"This is undoubtedly the best market for gold and silver in 10 years," he added.

Layton made the above remarks as the prices of gold and silver are rebounding, with the price of gold rising by 2.4% last month to $2,749.10, and the price of silver rising by 6.5% to $34.01.

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Last week, after concerns about further tensions with Iran escalated, gold prices climbed to a historical high, surpassing $2,700 for the first time.

Due to geopolitical, changing economic landscapes, and ongoing inflation concerns, investors have flocked to gold this year amid concerns about volatility in other assets.

Bank of America said in a report last week that even the risk of U.S. Treasury bonds is increasing amid rising U.S. debt levels, making gold the ultimate safe haven.Layton stated that the rebound is particularly impressive, considering factors such as high-interest rates, increased employment, and weak Chinese imports, which are typically bearish signs for metals.

"Frankly, despite many factors being unfavorable to gold and silver, they are still rising. Over the past few months, variables closely related to gold and silver have been unfavorable to them," he added, "but they have been on the rise."

Layton is one of many analysts who are bullish on metals. Bank of America strategists predict that by the end of next year, gold prices will reach $3,000, implying an increase of more than 8%.

Strategists said in a report last week: "Gold seems to be the last 'safe-haven' asset, motivating dealers, including central banks, to increase exposure."