Gold after a short decline below the $1,300 mark, has now moved up again above $1,300, before dropping just over $1295. This psychological barrier has been the story throughout the year. Now, it is time to ask what is about to unfold for the yellow metal.
Why Gold Moves up Again
There are a few reasons to justify why gold has moved up again. Inflation is running below expectations. At the same time reports indicate inflation will continue to run below expectations, for the rest of the year, which will push the Federal Reserve to rise rates in a slower sequence. The markets question the higher rate policy and the result out of this will be higher prices for gold.
In addition, reports suggest that the U.S. Federal Reserve’s policy might not be so dollar-friendly later in the year. As a result, there will be some upward push for gold this month.
With consumer sentiment at a record high, we are seeing plenty of confidence in the existing system. That means gold is not considered as a hedge against turbulent times right now.
Will Gold Stay Above $1.300?
The gold price forecast is always challenging, once the price hits $1.300 nothing guarantees it will stay there. A serious investor should examine all the other elements that affect gold’s price and whether they will continues to be on the headlines throughout the rest of the year.
The policy of the Federal Reserve will play a crucial role on gold’s price. The numbers suggest Federal Reserve might not take the actions it has planned. It’s difficult to forecast exactly what is going to happen next. We all know the Federal Reserve will be meeting in December to discuss the future of interest rates. That makes it even harder for a gold price forecast.
Reasons for Optimism
The good news is that it looks like gold is shaping up for an upward trend for 2017 and beyond. The headlines could change, gold will move back and forth the $1.300 level of resistance that needs to be taken out. When gold performs so well now with great economic news, then there is no doubt the rest of the year will be very interesting indeed.