Gold's Long-Term Bullish Outlook Unaffected by Selloff and Dollar Strength

The recent selloff in the gold market, which saw prices fall below $1,900 an ounce, does not change the long-term bullish outlook for the precious metal, according to Ole Hansen, head of commodity strategy at Saxo Bank. Despite the short-term weakness, Hansen believes that gold prices remain relatively strong and that the weakness in gold is expected given the Federal Reserve's tightening bias. He predicts incoming stagflation and maintains a patiently bullish view on gold, citing the fear of a soft-landing failure and the increasingly challenged US economic outlook as factors supporting gold as a safe-haven asset. Hansen suggests that gold prices could potentially test support at $1,800 in the near term, but there may be solid resistance between $1,840 and $1,850.