In this article I will discuss gold price forecasts for the coming year. There are three big events that will play a big role in determining the market direction and trend over the next 12 months. These events are the U.S. election, Canada’s general election, and China’s devaluation. In addition there are many economic indicators that can help investors make a profit by timing their buy and sell decisions.
There is no way to predict what the political landscape of any country will look like in the future. However, there are several things we can look at that may give us an indication as to what the likely outcome will be. First of all, it is important to note that any change in currency rates will have a major impact on the exchange rates of any two countries. This means that if the dollar strengthens versus the Canadian dollar (which usually happens during a political transition) or the British pound, the prices of those commodities will increase.
Canada’s general election is coming up soon and is expected to be very tight. The governing party is currently divided between the left and the right. With one seat, the New Democrats has more support than the Liberals. The Liberals are in a slight lead on the left with the New Democrats. A potential hung parliament situation could result in a minority government for the Liberals, which would mean there would not be a majority on the other hand the New Democrats could hold onto a majority. Based on what we know about politics in Canada these situations tend to result in one party controlling the economy and therefore have a huge impact on the gold price forecast for the coming year.
Another event that will have a significant impact is the Chinese devaluation. At its current rate of appreciation China is the largest producer of gold and many believe it will take control of the gold market. The Chinese economy has recently been struggling with high debt, low commodity prices and mass layoffs. If the government starts to devalue the currency it will definitely affect the gold price and consequently many gold traders will start to sell their metals.
A significant event that may have a profound effect on the price of gold is the U.S. Federal Reserve’s decision to raise interest rates. Many expect this move to cause a correction in the markets. Even though the move is expected to pass off, the change will certainly have an effect on the price of gold. Speculators around the world are watching the move carefully and many believe the move will have a long-lasting impact on the gold market.
In addition to all of these events mentioned in this article, there is also inflation. When there is inflation, it can make it more difficult for people to purchase physical gold because they have to use money to pay for items. Although there is some inflation, there is no doubt that it is slowly eroding the purchasing power of cash. As the gold price forecasts indicate, the purchasing power of the dollar is still very high and so people who hold dollar are not feeling the pinch as much as people who own gold.
Gold has always performed well when inflation is around because it serves to store value. In the past, gold has been used to purchase items that cannot be sold in the traditional marketplace. For instance, gold can be used to buy gold bullion or bar; this way one can have physical possession of the asset even if they have lost their financial footing.
All of these factors put together mean that there is likely to be a substantial move in the gold price forecast. If you want to take advantage of this and get in now, make sure that you know about the current state of the economy before you make any purchases. With all the bad news, gold prices are actually looking pretty good! Go grab some now!