An Outlook of Gold Investments In 2018
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Thinking of investing in gold? Before you do so, you might want to know about the market conditions. Expert opinion is extremely important especially when it comes to financial investments.
There’s big money involved and you want to make sure your investments stay secure. Note that this is not just limited to the gold market.
Gold Markets in 2018
Financial gurus will tell you that the first half of 2018 has proven to be quite eventful. The year had started with a price hike because of which several people pulled back their investments in the first quarter.
The U.S. central bank had also announced that the prices will further increase in 2018 and this, too, had an impact on the investors.
However, since June, the prices have been relatively stable. In fact, a downward trend has been observed—which is a positive sign.
What’s The Market Sentiment?
Experts have stated that they expect the number of gold future contracts to decline in the future. Just to give you an idea, they expect 120K contracts, which is quite a drop when you consider the current positioning (190K).
Of course, a lot of that has to do with the central bank’s announcement and only time will tell if it will have a long term impact on the market.
Bull market refers to a situation where the inflation increases. In such a scenario, experts expect the central bank to increase the price twice—as is predicted in 2018. This will result in a treasury yield of 2.8%.
In such a situation, gold prices will increase to $1420/oz. They expect the prices to decrease to $1400/oz by the end of the year.
In this situation, it’s expected that there will be four hikes in gold prices. This will affect the treasury yield at an estimated 3.3%. It will also result in a decline in gold prices which will be around 1100/oz.
What Drives Gold Markets?
Gold prices depend on multiple factors. For example, the value of dollar has an impact on its performance. Apart from that, investor threshold, too, has an impact on prices. This basically refers to the degree to which investors are willing to invest in this segment.
Then there’s demand for gold. If statistics are anything to go by, the demand for gold is likely to increase in the future. You can rest assured that this will have an impact on the prices.
Wealth and economic expansion are also major factors that need to be taken into account. Plus, you will also have to factor in market risks to the mix.