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Gold’s Stellar Move This Year Set to Continue
Aug 4, 2016 10:08 AM
By Rapaport News
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RAPAPORT... Gold is expected to extend its impressive run this year as
investors use the yellow metal to hedge portfolio risk, according to the World
Gold Council (WGC).
The price of gold breached $1,360 per ounce for a second
time in 2016, a level previously seen in early 2014, the WGC said in a market
update August 3. It surged almost 29 percent in U.S. dollar terms between
January 1 and August 2. The asset has outpaced all major benchmark indices.
Analysts have increased their price forecasts, with UBS
expecting the metal to hit $1,400 per ounce at the end of the year. Credit
Suisse and Bank of America Merrill Lynch even predicted a surge to $1,500 per
ounce in the coming six months. The median Bloomberg forecast for the end of
2016, based on 16 analysts, is 16 percent higher than it was at the start of
the year.
Weak demand for Japanese Government Bonds indicates
investors are starting to lose confidence in the effectiveness of unconventional
monetary policies, the report said. This follows increasingly desperate bids by
central banks to reflate the global economy.
“In this environment, we believe investors are using gold to
hedge portfolio risk as they add more stocks and low-quality bonds to their
asset mix,” the council said.
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Tags:
gold, gold price, gold prices, investments, Rapaport News, World Gold Council
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