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Falling Gold Prices in USA and Future Outlook of Gold

Gold bullion vs Gold StockPerformance of Gold in 2014
When the year 2014 started, the price of gold was expected to reach the new highs but these forecasts did not prove to be right. What happened to Gold prices in USA during 2014? Even the year 2013 was rough for gold prices and it did not gain its shimmer in 2014 either. The major cause was rise in the dollar value and falling energy prices. The equity markets continued to draw the interest of investors away from gold.
The global demand of gold among investors fell due to the fall in prices. The demand in India fell due to the condition of the Buoyant Stock Market. In China, the investment in gold bar and coins slightly went up. The demand of gold in European and US markets was not much significant either. The major buyers of gold were only the central banks. The demand of gold among investors was low but the supply was more.

Performance of Gold prices in USA in 2015

In the Q2 of 2015, the gold prices remained unchanged. The market is currently weak because of the interest rate and the strong US Dollar. In May 2015, the gold prices in USA was at $1,230 but as Dollar continued to strengthened, it pushed down the metal’s price to $1,163 in early June. Currently, the prices are below $1,200. The interest of investors towards gold hence seem to be limited.
Future Outlook of Gold Prices in USA
Now as we are reaching the third quarter, the question is what is the future outlook of gold prices? It is expected that the Federal Reserve is going to revise its interest rate policy in September and use measures to increase the interest rate.
According to Trading Economics, by the end of the second quarter, gold prices in USA will reach$1,058 per ounce. A bearish trend in gold investment is expected ahead in the Q3 of 2015. The following possible reasons explain the cause:
The first reason is the falling Federal Reserve interest rate in the Q2 of 2015. It will further make the US dollar stronger and the gold prices will remain in pressure throughout the year. The demand for physical gold by consumers will increase but it will discourage investors from investing in gold.
Another possible cause is slow economic growth in China and Europe and the fall in the prices of crude oil. Reduced inflation lifts the real rates and it discourage investors, who buy gold and silver as hedge, to make any investment in gold.
According to the S&P Credit Analyst, the estimated price for gold in September will be $1,200 but as gold is going to remain highly volatile, the prices might even drop below $1,100. The gold investment industry will not be profitable.

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About Emaad Qureshi