Recent financial news and turmoil in the market has opened up opportunity for investment in gold and other precious metals. Both bonds and equities are exhibiting persistent volatility, leading many investors to begin the migration to more stable gold holdings. The recent upswing in gold has been partially capped by the gains in the U.S. dollar, but to many analysts the precious metal outlook for the remainder of 2015 is strong.
The Argument Against Gold
Some analysts suggest that the gold market is not solely dependent upon domestic monetary policy. Even if there is a tightening of monetary policy, safe-haven demand and transactions within emerging markets can offset any developments within the United States. Opportunities are presenting themselves for the savvy investor.
The Demand for Gold
Gold demand is also seen as rising as a hedge against inflation. The Federal Reserve is expected to raise rates once inflation ramps up; gold will hold its value through these trying times. Additionally, led by the Russian central bank, gold is in demand as efforts continue worldwide to diversify away from the U.S. dollar. This increased demand for bullion will help hold its value through the year and beyond.
Recent Activity With Gold
In recent weeks, gold exchange products have seen in increase in inflows. While the inflow has been modest, many experts posit that it is the beginning of positioning and efforts to take advantage of an expected upswing in the price of gold. In fact, some analysts foresee gold increasing in value by 5-10% though the end of 2015.
While most of the attention in the precious metals department is focused on gold, other metals have stories to tell. Platinum has lagged in 2015, with its price breaking certain psychological thresholds that increase sentiment-driven trading. However, with almost universal bearish feelings about platinum, some analysts believe the turning point is soon, with platinum returning to form and mirroring gold’s increases.
Silver has experienced sharp gains in recent months and jumped over 130 percent in value in May alone. The Chinese demand for the precious metal remains robust and this demand will continue to help boost the price through the end of the year. Prices, now stable at close to $16 per ounce are expected to rise to over $18 per ounce by year’s end.
Recent events, including the Federal Open Market Committee rate decisions, have pushed the U.S. Dollar Index lower. This trend tests the resolve of those investors bullish on the dollar and opens opportunities for precious metal investors. Gold, platinum, and silver have all experienced some good news and further upswings are likely as we head towards the end of 2015.
Speculation of increased inflation helps drive interest in gold and the current situation is a prime example. Federal monetary decisions and commentary about those decisions has recently put gold in the spotlight, with strong gains for all precious metals in June 2015. It is always difficult to predict the whims of certain actors in the financial markets, but precious metals, with gold at the forefront, continue to offer the savvy and interested investor opportunities not available with other assets.
This article was written by John Cheevis. John is a wealth of knowledge and loves to write about anything financial.