How was the beginning of 2016 for gold prices? What global events have impacted prices? What was the performance of prices during the last week?
All this and the forecast by a globally recognized bank in today's market review.
How did gold prices start 2016?
The media have reported that the price of gold has grown by 4% since the beginning of the year. The US dollar index, however, has remained stable.
Since the stroke of midnight, there have been dramatic changes in different regions that have affected the price of gold.
Regional events and the price of gold
The Middle East
One of the main factors that is encouraging the growth of gold prices is the geopolitical turmoil in the Middle East. Experts suggests this factor will keep rising gold prices until the situation stabilizes.
India
The economic situation in India is currently suffering hyperinflation, being favorable for gold prices. Nevertheless, in 2015 the harvest was poor and that can reduce the demand for gold by 10%, as estimated by experts. The media has also reported that the Indian government is again trying to monetize gold of the population offering 2.75% interests.
China
Gold prices increased in China by 5.3% due to the weakness of the yuan. According to the news, Industrial and Commercial Bank of China (ICBC) will join the LBMA by the end of this year. Some experts assume that it will play an important role, since gold demand and prices are traditionally high in China.
The United States
The U.S. dollar remains stable hampering gold prices to a certain extent. At the same time, the stock market is in decline, compensating the balance.
Analysis from 11 – 18 January.
During the last week gold prices have decreased, though showing a gradual improvement.
On Monday, January 11, gold prices were stable at $1,095.96 per ounce. On the following day, prices decreased to $1,086.50 per ounce, growing on Wednesday.
However, on Thursday, prices fell again to $1,078.42 per ounce, though starting a gradual growth. On Friday prices were at $1,088.70 per ounce and on Monday $1,089.42 per ounce.
Forecast by Barclays
At the moment, prices continue to grow. According to leading experts including Peter Schiff, Jeff Gundlach and Michael Fuljenz the price of gold will keep increasing throughout the year.
The well-known Barclays Bank has made a forecast stating that the average price of gold will be $1,100 per ounce in 2016, and $1,200 per ounce in 2017.
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