Gold price decreased by 8.15% below USD 1,200 in the last one year period. According to “Bloomberg Intelligence” commodity market analysis price could potentially increase to USD 1,400.

In terms of shortfall risk for the next year, if the US dollar appreciate in value and stock market indices rise the price could go below USD 1,120. But historic indicators suggest that this possibility is very low. If the 2017 pattern of reaching average price repeat one price of gold per ounce could reach USD 1400.

Historic records show that investment funds increased their gold exposure when federal reserves strengthened monetary policy. For example when the feds increased policy rate for the first time, gold holdings increased by 47% in these funds. Since 2013, gold price never dipped more than 8% from the 52 week average. There is no indication of further declines in price according to Bloomberg’s analysts.

April this year Bloomberg’s USD spot index and the S&P 500 both fell and gold prices reached USD 1400. Since then the equity market recovered and the USD appreciated in value and gold prices stabilized around USD 1,200. Analysts think that market participants changed asset allocations too fast and prices have fallen too low.

Current price movements are similar to the one in 1999 when price rose by 34% in 3 weeks. If the same movements happen gold prices could reach USD 1,600 said Bloomberg’s analysts.

Source: BloombergTv.mn