14th April 2015
The recent dollar strength forced gold back below the $1,200 level, despite interest from foreign buyers. The precious metal has now declined for its fifth session in six. Furthermore, the looming interest rate hike from the Federal Reserve is weighing on gold prices, as any rate increases will send the greenback even higher.
Despite this, gold remains close to the seven-week high of $1,220 it hit last week, which suggests any indications of a delay to interest rates will see the yellow metal look to retest these levels.
However, the rising dollar will continue to curb any rallies in gold, as the Fed will likely raise rates this year. As such, analysts point towards gold declining further later in the year.
The consultancy and research agency, GFMS, expects gold prices to slip to $1,100 per ounce-levels in 2015, with an annual average of $1,170 per ounce.
The GFMS team at Thomson Reuters says that prices may recover in 2016 due to an expected rise in physical buying and investment demand from Asia.
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