The gold price will average $1,135 per ounce in the third quarter of this year, GFMS said in its latest Gold Survey report, and $1,175 in the fourth quarter.
This compares to a second quarter average of $1,192 per ounce and current spot gold price of $1,095.
The third quarter is widely expected to see the first increase to US interest rates since 2008. Higher interest rates in theory would push many gold investors into more yield-bearing assets such as bonds. GFMS on the other hand believes that much of the action has already been priced into gold, and that the first increase will in actual fact push the metal’s price higher.
“It remains our view that a US rate hike this year is already priced into the market and that an increase could well prompt review of asset allocations that leads to an increase in gold holdings,” GFMS said.
The members of the Fed’s policy board are locked in a debate on when will be the right time to raise rates, which have been near zero since December 2008. Since its decision is now entirely dependent on US data, a rate increase could happen at any future meeting. Ten of the 17 voting members expect a rate hike sometime this calendar year.
As a result, GFMS increased its average forecast for 2015 by $10 to $1,180 per ounce, with 2016 forecast to average $1,250.
(Editing by Martin Hayes)
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