National Bank Financial economist sees "compelling" reasons for owning bullion
Gold may seem stuck below the US$1,700 per ounce mark, but U.S. data set to be released next week could provide
bullion the lift investors have been waiting for.
Stefane Marion, chief economist and strategist at National Bank Financial, in Montreal, pointed to recent labor market dynamics in the United States.
He estimates that upward revisions to employment levels, coupled with weak GDP growth, will drive fourth quarter unit labor cost inflation to 2.1% year-over-year, or 4% higher on a quarterly basis. This data is due to be released next Thursday.
Mr. Marion noted that this would mark the first time since early 2011 that unit labor cost inflation will be higher than core (personal consumption expenditure) inflation, which is the Fed's preferred measure of price pressure.
The strategist also pointed out that the last time this happened,
gold rose more than US$300 in the subsequent months.
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