2017: Will Gold Prices Recover from Record Lows?

2017 has seen its fair share of highs and lows, and we can say the same for the price of gold. Gold’s volatility means it reacts to just about any economic or political situation. The Trump Administration and the Brexit Effect are two of the most obvious factors affecting the price of gold this year. But it doesn’t stop there. Everything from growing demand in India and China to newly discovered gold veins spells record-low prices for the precious metal. Today, we look at some of the factors affecting gold’s value this year. Indigo Precious Metals is a leading company in the sale and storage of precious metals. Our world-class, high-security vault in Singapore is the most secure facility of its kind. Look nowhere else for all your precious metal needs. You can visit our website at www.indigopreciousmetals.com for live pricing and all the latest news.

Struggling Prices

Despite prices falling as much as 40 percent over the last few years, precious metals analysts predict that gold may start to make its comeback. Only recently have gold prices hit their biggest slump for five years, falling to just $1,102 per ounce. Inflation plays a leading role in gold prices, alongside additional factors like rising dollar value and increasing demand from the Chinese market. Analysts predict that bullion especially, while on the rise, will see meet with more struggle in the short-term. Inflation and exhausted equity markets both play a hand in gold’s struggle to bounce back from its price lows. The next few months should create a clearer picture of gold’s future.

Falling Equity

Experts believe that exhausted equity markets may have played a strong hand in gold’s trajectory this year. Gold is expected to fall even further than recent lows of just over $1,100, predicted to hit as low as a mere $945 per ounce. Naturally, a figure below the $1000 mark would do little to attract potential investors. But, as Barclays technical strategist Lynnden Branigan has suggested, the $1000 mark may be the ideal figure to restore confidence in gold this year.

Inflation

We often see investors use gold as a hedge to ward off inflation. While interest rates rise, gold prices fall. Any financial impetus will fan the flames of inflation, which, according to analysts, is why precious metal demand, especially for gold, increases alongside declining interest rates. On the other hand, as the last six months have proven, inflation has barely budged, not just in the US but on a global scale. The price of gold has suffered drastically because of this, yet, as predicted, this may change soon.

External Markets

With some short-term difficulties to overcome first, analysts like Christopher Swann at UBS Wealth Management, see improvement on the horizon. Once over the hurdle, the price of gold could return to healthy levels following its recent nose-dive. Furthermore, more buyers from Asian markets like India and China may be attracted by the current low prices. Interest from other countries could provide the much-needed boost to get gold back on its feet within the next 12 months. But for now, investors will have to wait and see how current forecasts pan out.

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