Good Year for Gold?
There is reason to believe that this will be a good year for gold and other precious metals, according to some experts.
Early trading this year has been a bit withdrawn, though gold has steadily climbed over $100 per share from a six month low in Oct. 2018. It is now trading around the $1300 mark.
But the reticence regarding precious metals may have come to a halt with the Fed’s announcement that it will not be increasing interest rates soon, and the suggestion that it may not do so again this year. That announcement should increase investor’s confidence in the market, which should in turn mean good things for precious metal prices.
So says Suki Cooper, Standard Charter’s Executive Director of Precious Metals Research. She believes that the market was building the uncertainty regarding interest rates into the price of gold and silver. But now that the Fed has all but removed that uncertainty, prices should start to rally.
“We expect gold to end the year on a strong note,” Cooper told CNBC. “It’s the fourth quarter that we’ll see gold prices testing the highs that we saw in 2018 and 2017 and potentially matching the highs from five years ago.”
The prices to which Cooper refers are around $1370, the five year high dating back to 2014. That’s still a far cry from ten-year high prices in the $1800 range, but it’s an improvement, to be sure.
The Fed’s news may actually bump up Cooper’s timeline. With them publicly acknowledging that they are unlikely to raise rates before the end of the year, the confidence of consumers and traders may strengthen sooner than Cooper forecasted. If that’s the case, gold may climb even higher than she projected (though keep your expectations reasonable).
There’s volatility in every market, but with this news coming during the buildup to an election and the lingering uncertainty that comes with it, there’s a good chance the precious metal market will show some growth in 2019.