According to Thomson Reuters, gold will fall on the higher demand on the Asian markets and probable US dollar strengthening. The price of the precious metal will decrease lower than 1,200 dollars per ounce while since the beginning of the year gold has gained more than 15% - up to 1,240 dollars per ounce.
Analysts think that the growth observed since the beginning of 2016 is going to be brief as the rally on the market tones down. Investors expect tightening of monetary policy by the US Federal Reserve, which could lead to the US dollar strengthening against the major currencies. As a result, the dollar-denominated gold will slump.
One more key factor which influenced gold price was the slowdown on the major Asian markets, which started in 2015. Thus, in China, for instance, the demand for gold, if not taking into consideration central banks purchases, decreased by 7% to 867 tons per year. The world’s demand for gold fell by 2% in 2015 to 4.1 thousand tons, at the same, the gold mining volumes rose by 1% up to 3158 tons. The production of golden jewelry decreased by 3% to 2.2 thousand tons.
At the same time experts don’t think that the probable slump in gold prices is a good reason to sell assets. Investments in gold can be a good addition to the portfolio to assure diversification of investments.
