Three reasons confirm that gold will rise to historic levels

History of edits:: 2016/7/14 16:20



{International: Euphrates News} markets experiencing a rise in gold prices since the beginning of 2016, despite the sharp fluctuations in the stock market, which is associated with investors worried about the prospects for global economic growth.

By 14:58 Moscow time of trading on Thursday, July 14 spot trading of gold reading recorded at $ 1325.30 an ounce, compared to $ 1060.90 an ounce record the precious metal in the last trading day of 2015, which means that gold has risen about 25% since the beginning of the year .

There are several reasons to believe that gold prices will grow up in the medium term to 2000 dollars per ounce, with the following highlights three reasons to confirm this.


1. decline in bond yields

Bond yields are one of the most significant factors affecting the movement of gold prices, as investment in securities at an annual yield of 2% and less becomes less attractive when taking into account the inflation index.

The world is witnessing the recent decline in bond yields, as the Japanese and German bond yields to 10 years dropped to below zero, while the proceeds of US Treasury bonds for 10 years, currently less than 1.4%.

Although the rise in the dollar against the euro and the pound sterling usually means falling prices of the yellow metal, but gold will continue to rise and to the fact that alternative investments less profitable, so blindingly less attractive in the eyes of investors.

Demand plays a fundamental role in determining commodity prices, including gold.

The statistics showed that the outflows from the gold-backed exchange-traded funds reached in 2014 and 2015, about 183.6 tons and 128.3 tons respectively.

While the total inflows to these funds in the first quarter of 2016, about 363.7 tons, a figure exceeding outflows in 2014 and 2015, according to data from the World Gold Council.

This suggests that gold has become more attractive as a safe haven for investors, which will lead to higher prices of the precious metal as a result of increased demand. It has become the gold thrown attracted not only by investors, but also by the central banks, and jewelry sectors and technology.



3. uncertainty about the US election and exit of Britain from the European Union
Gold is considered a safe havens, and usually held that when the prospects for global economic growth to be blurry increase demand for the precious metal. So far there is no certainty about what will happen after Britain out of the EU membership.

It can be explained by the recent recovery in US stock markets that concerns about "Brixt" exaggerated, but some experts believe that Britain out of the EU would have negative consequences for the United Kingdom that would lead to the stagnation of the economy, and under that haunt investors worried about what will happen in the future.

Similarly, the uncertainty of the US economy because of the damage the ambiguity of the results of the upcoming presidential election, and therefore leads to higher prices of Alzhb.anthy


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