Gold has been on fire this year and some investors think it is poised to do something it has only done twice since World War II.
Gold is trading above $1,400 per ounce for the first time since 2013 and is up more than 12% year to date.
"If our judgment is correct and the U.S. economy is softening and inflation will fall moving forward and yields are going to stay low for an extended period of time, then that's bullish for gold," one strategist says.has been on fire this year and some investors think the precious metal is poised to do something it has only done twice since World War II: enter a major bull market.
Gold could build on these recent gains as the Federal Reserve gets set to lower rates, U.S. economic activity slows and trade tensions remain. Historically, gold has rallied when the Fed cuts as it depresses bond yields and the U.S. dollar. Gold is also used by investors as a safe haven to trade amid geopolitical tensions.
China and the U.S. have been engaged in a trade war for more than a year, exchanging tariffs on billions of dollars worth of their goods in that time. The two countries agreed to restart trade talks late last month. But President Donald Trump said Tuesday the two sides still had a long way to go before they reached a deal.
The last major bull market in gold lasted from the late 1990s until 2011. The one before that ran between the late 1960s and 1980. Gold benefited from the Fed lowering interest rates during both of those periods, as the central bank's measures helped spur inflation in the U.S.
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