Gold primed to soar in 2016, and here’s why
The light at the end of the tunnel continues to stay lit for gold. Prices for the precious metal posted the biggest one-day gain in more than 14 months on Monday, rising 3.5 percent--and briefly above $1,200 an ounce--to close at $1,197.90. As global financial markets continue to tumble the trend for gold could easily skyrocket in 2016.
“A strong risk-off sentiment is feeding into the gold market,” said James Steel, chief precious-metal analyst at HSBC Securities (USA) Inc.
According to The Wall Street Journal, "a fall in the dollar against other major currencies, sharp losses in equity markets across the board and a continuous slide in oil prices have contributed to investor jitters about the unsteady economic conditions and weakening corporate earnings, pushing investors to plow money into gold."
• Related: [INFOGRAPHIC] 3 Major reason to own gold in 2016
George Gero, a precious-metal strategist at RBC Capital Markets, said “it’s the fear of the unknowns” that is driving the demand for gold.
"The drive for gold today is purely tied to the risk type of trade," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago. "People have to move their equities out of there, have to put (money) into safer assets."
The yellow metal, which has logged losses for three consecutive years, also has investors feeling bullish. Sushil Kedia, President of the Association of Technical Market Analysts (ATMA), believes gold prices will eventually double past $2,000 an ounce.
Other precious metals such as platinum, silver and palladium were also up. Prices for platinum rose 2.2 percent to $926.98, silver jumped 2.8 percent to $15.39 an ounce, and palladium reached $515.20 an ounce, up 2.9 percent.
Stay connected! Follow us on Twitter and like us on Facebook
Featured Articles
A fleet of Huaneng Ruichi autonomous electric mining trucks have been deployed in China, supported by Huawei's Cloud Services and 5G-Advanced network
Rio Tinto completed its US$6.7bn acquisition of Arcadium Lithium, making it a key company in raw materials mining for batteries in the energy transition
Intel first began to work towards responsibly sourced conflict minerals from the Democratic Republic of Congo and adjoining countries about 12 years