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Future of the gold prices

gold-trading-online1The ongoing financial year has remained one of the most volatile years regarding the gold prices. Much remarkable turmoil has been occurred as opposite to the investors’ anticipations. It pertains to a blend of different views by the gold prices experts in order to forecast the future gold prices for 2015.

 

Annual compounding rate of 18% against the United States Dollar between the year 2002 to 2013, the average price of gold fell by 15% everyday during 2013. However the price cut down again by 10% during 2014. The best forecaster of 2014, announced by London Bullion Market Association’s 2014 gold forecast, Mr. Frederic Panizzutti opines that the gold prices will gain a little as 2% on an average with the same annual compounding rate against US dollar.

The top ranked fund manager Evy Hambro opines that all precious metals are expected to recover the three-year slump in the year 2015. Since the peak in summer of 2011, gold prices are being observed continuously decreasing. Till the end of 2014, the gold prices have fallen 40 percent on an average as compared to the highest in 2011 i.e., $1900 per ounce.

However the most endorsed forecast is the revealed by London Bullion Market Association (LBMA) as follows:

Precious metals 1st half Jan 2015 ($) Average 2015 forecast ($) Actual 2014 Average ($)
Gold 1218 1211 1267
Silver 16.41 16.76 19.08
Platinum 1225 1294 1385
Palladium 796.20 838.40 802.95

This probably shows the better picture of upcoming trend keeping in view the most influencing factors i.e., oil prices and global inflation phenomenon all along. According to the LBMA’s realistic analysis about gold prices, it is expected that the average of its prices will again explicate a downward trend however, the artificial bubbles of inflation may be observed in response of speculative activities in stock market and OTCs.

Professional and academic analysts have enlisted a number of factors which will likely to restrain the prices during the year 2015. The most powerful factors include the empowering of US dollar against other international currencies and the interest rate hikes which will be proposed by the Fed in first half of 2015. Furthermore, the QE program implementation in Europe will decrease the attraction of gold as a hedge and will scrupulously provide reducing of oil prices. On the contrary, a rise in demand from China and India is expected, but it is not significant to please the expectations of analysts officially.

A few analysts are examining the situation with a different perspective and declaring the geopolitical activities as a driver to boost the international demand. However this is not being supported by a large group of analysts conscientiously. This is an iceberg challenge as per the famous saying of Donald Rumsfeld’s. According to which the phenomenon is pretty much unknown and must not be considered as significant to affect the forecast.

The overall opinions of the analysts, it is confined that the supply of gold will remain in surplus this year as well. The demand driven forces are not sought to be much significant and cannot pertinently increase its prices on noticeable extent.

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About Emaad Qureshi