Fundamental factors are still in place to push gold prices up, but momentum will not be sustained without price corrections along the way, this according to Peter Hug, global trading director of Kitco Metals.
"If you use the argument based on our global debt, [gold bulls are] right, gold should be higher than where it is at $1,500 and I think the day will come when gold will surpass the 2011 high," Hug told Kitco News.
Hug noted that should gold run "in a straight line" to above $2,000 an ounce, it would imply a serious issue in other areas of the markets, either in equities or bonds.
On the planned meeting with President Donald Trump and Chinese vice premier Liu He, Hug said that a deal in favor of Trump will be unlikely.
"I think there is going to be a concessionary deal struck, at least I hope so...where the Chinese may buy some egg products. The U.S. may not drop tariffs but may delay implementing the increase that's due at the end of next week, so just they both can walk away with somewhat saving face," he said.
Importantly, Trump needs a "win" in his negotiations with China, especially amidst the controversy with Ukraine and the threat of impeachment, although it is unlikely the Republicans would approve the decision to impeach, Hug said.
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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.