(Kitco News) - Gold is showing a divergence with the dollar and stocks, indicating upside potential for the yellow metal in 2019, said Mike McGlone, senior commodity strategist at Bloomberg Intelligence.
"A lot of the drivers are turning positive. The volatility of the stock markets is turning up, from the lowest ever...and the dollar has had a substantially strong year. The trade-weighted dollar is the best performing major asset class on the planet this year. It's up 8% this year, yet gold is trickling, it's up/down 6%. To me, I see a sign of divergent strength," McGlone told Kitco News.
McGlone added that those pressure factors are likely to go away in 2019, paving the way for gold to rally.
"The key thing is, bottom line, everybody knows the dollar has to stop rallying," he 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.