Gold prices tend to reach $1,400 by early 2018 Gold prices tend to reach $1,400 by early 2018
According to Bank of America Merrill Lynch analysts, the precious metal price is set to jump to a four-year high at the beginning of 2018. The yellow metal’s climb began in the last days of August, when a weaker dollar pushed it above the $1,300-per-ounce mark. Then gold hit a 10-month high, jumping 1,4 percent to reach $1,326, and it was the highest level since the US election. As Mihir Kapadia, CEO of Sun Global Investments, said in a note, “there is increasing expectations for President Trump to counter react to the North Korean aggression, which may further propel the prices upwards”. The gold price is on its track to jump to a four-year high of $1,400 by early next year, according to Francisco Blanch, head of commodities research at Bank of America Merrill Lynch. Lower long-term US interest rates and a lack of progress by US President Donald Trump in delivering reforms will provide support. “The Fed may be a little bit more cautious in their stance on raising interest rates for the remainder of the year. There are a lot of uncertainties out there,” Phil Streible, senior market strategist at RJO Futures in Chicago, told Bloomberg. It could be good for gold if the Fed decides to increase interest rates at a slower pace. That’s because higher interest rates increase the opportunity cost of holding non-yielding bullion. Earlier this month, hedge fund billionaire Ray Dalio recommended investors to allocate 5-10 percent of their portfolios to gold. He mentioned risks including the North Korea situation, as well as the possibility that Congress may fail to increase the US debt ceiling, leading to a technical default. By the way, the US dollar fell in the last days of August to its lowest level in more than two years, providing additional support for the gold price.
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