adminGold Price Forecast – XAU/USD on the Precipice
Predicting gold prices is a science, but sentiment analysis and technical trading can also be an art.
This is because the market is highly cyclical and prices can rise and fall in a variety of ways that depend on supply and demand, interest rates and other economic factors.
A number of analysts have lowered their expectations for gold prices in the near term. For example, analysts at HSBC have cut their average forecast for the price of gold by 9.2% and Credit Suisse reduced their forecast for 2013 and 2014.
Analysts from Bank of America are expecting a rise in the price of gold in the coming years. They believe that a weak US dollar and a strong economy could push the price of gold above $1,500 an ounce in the coming year.
According to Michael Widmer, an analyst at the bank, there are several reasons why a price increase could occur. These include trade conflicts, loose monetary policy and a higher expectation for inflation. In addition, there is a strong correlation between gold purchases by central banks and price increases.
Another reason why gold prices are expected to rise is because investors may want to diversify their portfolios away from equities, which have been affected by the recent stock market corrections and are also sensitive to US interest rates. The Fed may have to raise rates to protect the currency against further inflation, which would reduce the opportunity cost of holding non-interest bearing assets such as gold and other precious metals.
The analysts at Goldman Sachs are looking for the price of gold to reach $2,000 an ounce in the coming years. This is due to the strong investor demand for the precious metal.
They expect a stronger economy and lower interest rates to push the price of gold up by as much as 25% in the coming year. This would allow more investors to buy gold and make it a safer investment.
On the other hand, Goldman Sachs also sees a rise in interest rates and the strengthening of the dollar as the main risk for gold prices. They expect the price to be a bit below $1,500 an ounce in the next six months and to go up as high as 1,600 an ounce in the following two years.
This would mean that the price of gold will be able to keep up with inflation and the growing interest rate environment, while at the same time the central banks around the world would continue to accumulate the metal. In this way, it would be a safe haven for the global economy and a hedge against financial turmoil in times of crisis.