Last Friday, gold rose 0.94% from $1,170.57 to $1,183.28. It seems investors have returned to gold after Fed declared it is in no hurry to raise interest rates, as well as lower expected interest rates from 1.125% to 0.625%.
Currently, gold is traded at $1,182.27 at 5:54 pm GMT + 7.
Gold may continue to edge up because of the following reasons:
- According to CMC Markets, investors are no longer worried much about the Fed’s rate hike, saying that interest rates will rise only slightly in the next 12 months. According to one poll by Reuters, the leading banks on Wall Street said that the Fed will raise interest rates as early as May 9. This will reduce the attractiveness of the dollar and investors may return to gold.
- Besides, the economy in India – the largest gold consumer in the world – is showing signs of recovery. China, the 2nd largest gold consumer are promoting connections to international gold market.
- Today there will be a report about existing home sales in the US. Lower than expected figures means that the US real estate market is performing poorly, which may hurt dollar and hurt gold price. In addition, Fed President, Yellen stated that stronger dollar will threaten inflation target. Moreover, concerns over Greece’s uncertainty may cause investors to return to gold as a safe heaven.
However, gold price may decline because of the following reasons:
- If data on existing home sales is strong, dollar may be supported and gold price will fall.
- If the conversation between Alexis Tsipras and German Chancellor Angela Merkel have good results, gold demand as heaven assets may decline.
Forecasting: Gold price could reach $1223.28.