Gold prices could reach fresh 6-year highs thanks to a slew of positive drivers

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Gold prices are on a path to fresh six-year highs, says precious metals expert

Gold is glistening.

The precious metal has rallied 11% this year, with much of the move occurring in the last several months, as concerns around slowing global growth and U.S.-China trade tensions took hold among investors. It continued to tick up on Wednesday after President Donald Trump said he intended to nominate two dovish candidates to the Federal Reserve's board of governors.

And there's still room for gold to run, even as far as its six-year highs, according to Suki Cooper, executive director of precious metals research at Standard Chartered Bank.

"There are a number of macro factors that have turned very positive for gold, and even though we've seen a little bit of a pullback, we think this is actually a healthy correction," she said Tuesday on CNBC's "Futures Now," referring to the yellow metal's dip in the previous session.

"Those key drivers of a weaker dollar, falling yields and the continued uncertainty and potential risk that we might see a widespread recession are spurring investors to turn to gold once again as a safe haven asset," Cooper said.

The Fed news, and the nomination of the International Monetary Fund's managing director, Christine Lagarde, to lead the European Central Bank, created an even more bullish environment for gold, Cooper said Wednesday in an email to CNBC.

"Dovish central banks, growing negative yielding debt coupled with the impact of trade protectionism on global growth create a favourable cocktail for gold upside risk," she wrote. "We continue to expect the Fed to cut by 25 [basis points] in July and then again in December, but the market has started pricing in some of the risk much sooner."

Compounding this action is a recent surge in gold ETF inflows, she said. In June, gold-based funds saw their highest inflows since the U.K.'s Brexit vote in 2016.

"Leading up to this recent rally, investors had been very underweight in gold. We're starting to see that move into speculative positioning," Cooper said. "There's still much more room to the upside, particularly when it comes to retail demand."

What really ignited gold's 2019 rally were worries around U.S.-Mexico trade relations, Cooper said. In late May, Trump threatened to slap tariffs on all Mexican imports if Mexico did not meet his demands regarding border security. The president later reached an agreement with Mexico to hold off on the tariffs "indefinitely."

Now, the yet-unresolved trade dispute with China, rising tensions in the Middle East and negative debt yields around the world are all also providing fuel for gold's rally, she said.

"We think gold prices should see good technical support around $1,373, so dips below $1,375 look [like] attractive levels to enter back into the gold market," Cooper said.

But the second half will likely take the yellow metal to new highs not seen since 2013, she said.

"We're expecting gold prices to pass $1,400 and average $1,450 in [the fourth quarter]," Cooper said Tuesday. "Particularly as negative debt around the world has continued to grow, we think that's going to be one of the key, major backdrops that continue to support gold prices."

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