gold prices expected to reach 1500 as inflation poised for comeback
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Gold prices expected to reach $1,500 as inflation poised for comeback

Arab Today, arab today

Arab Today, arab today Gold prices expected to reach $1,500 as inflation poised for comeback

Gold
Singapore - Arab Today

Gold is poised to rally to levels last seen four years ago as rising inflation and negative real interest rates combine to boost demand, according to Incrementum, which says that the precious metal may be in the early stages of a bull market.

Prices may climb to $1,400 to $1,500 an ounce this year, said Ronald-Peter Stoeferle, managing partner at the Liechtenstein-based company, which oversees 100 million Swiss francs ($101.5 million). Spot bullion — which was at $1,249 on Wednesday — last traded at $1,400 in September 2013. 

Gold has climbed this year as investors weigh risks that President Donald Trump won’t be able to implement his agenda, adding to uncertainty surrounding European elections and the Brexit process. Against that backdrop, investors are on alert for signs of faster inflation, with the Federal Reserve’s preferred gauge jumping recently to near the bank’s target. Policy makers raised rates this month, and kept forecasts showing two more hikes in 2017.

“For the short term, it’s in a bit of a technical no-man’s land, we also see that seasonality is not really favourable,” Stoeferle said in an interview in Singapore on Tuesday. “The real pick up in momentum might start beginning of summer. It’s in the very early stages of the bull market, so everybody is still kind of cautious or slightly negative, but this will improve.”

Inflation hedge

Bullion is traditionally regarded as an effective hedge against rising inflation, gaining in value to help holders preserve their wealth. While higher US rates typically buoy the dollar and can hurt bullion, the commodity has advanced during previous hiking cycles. Trump’s recent talking down of the greenback’s strength should also be positive for gold, according to Stoeferle.

Stoeferle manages 30 million Swiss francs in the renamed Incrementum Inflation Diversifier Fund, which he started in 2014 with partner Mark Valek. The fund uses its own inflation indicator, which is currently neutral to slightly negative. “As soon as we get the signal for rising inflation, we’ll invest in inflation-sensitive assets again such as silver equities, gold equities, energy and the broad commodity complex,” Stoeferle said.

Not everyone is bullish. Societe Generale recommends selling on rallies as it sees gold declining amid further tightening by the Fed and only limited impact from political events. The bank has forecast an average of $1,125 in the fourth quarter. That’s is line with the outlook for $1,230, according to the median of estimates compiled by Bloomberg.

Earlier this year, BNP Paribas — the most accurate bullion forecaster in the final quarter of last year, according to Bloomberg rankings — also sounded a note of caution. Bullion would probably decline as the Fed pursued rate hikes, keeping the dollar strong, the bank said in January.

Kaplan’s view

The Fed’s preferred gauge of inflation was 1.9 per cent in the 12 months to January, just below its target of 2 per cent. The Dallas Fed’s Robert Kaplan, a voter on policy this year, said this week he sees inflation and employment nearing the bank’s goals and continued to advocate gradual tightening.

Fed decision makers including Chair Janet Yellen have repeatedly rejected the notion that policy is too lax even as the economy recovers, with inflation ticking higher and joblessness dropping. “I currently see no evidence that the Federal Reserve has fallen behind the curve,” Yellen said in early March.

Consumer price inflation has been picking up in Europe, too. Euro-area inflation was 2 per cent in February, the fastest pace since January 2013, according to data from the bloc’s statistics agency. In the UK the same month, inflation was 2.3 per cent, reflecting sterling’s slump since the Brexit vote in June, as well as an increase in oil prices.

“Inflation is picking up,” said Stoeferle, citing what he termed monetary inflation as well as rising assets such as equities, and prospects for price inflation. “We’re seeing a pick-up in inflation all across the globe. We’re seeing it in the US, where basically every inflation indicator is constantly rising and making new highs. We’re seeing it in Europe, we’re seeing it in Asia.”

Source :Times Of Oman

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

gold prices expected to reach 1500 as inflation poised for comeback gold prices expected to reach 1500 as inflation poised for comeback

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

gold prices expected to reach 1500 as inflation poised for comeback gold prices expected to reach 1500 as inflation poised for comeback

 



GMT 12:47 2016 Thursday ,01 September

'La La Land' musical masterpiece dazzles Venice film fest

GMT 12:42 2017 Monday ,20 February

Dalia al-Behairy begins 'Yawmiyat Zoga Mafrosa'

GMT 19:01 2017 Wednesday ,30 August

Oil prices down as US reels from Harvey

GMT 04:19 2017 Monday ,08 May

National forces attack mercenaries in Taiz

GMT 19:21 2017 Sunday ,07 May

Iranian Film Week opens in Baghdad

GMT 21:33 2017 Sunday ,30 July

Arab Quartet meeting kicks off in Bahrain

GMT 17:17 2016 Friday ,07 October

Aleppo bleeds as US and Russia spar

GMT 12:03 2015 Monday ,21 December

Nepal protester killed in constitutional crisis clash

GMT 09:47 2016 Thursday ,22 December

Trump vows to cut F-35 spending, as leaked memo

GMT 21:44 2017 Friday ,15 December

King establishes Hawar Development Committee

GMT 20:57 2017 Tuesday ,16 May

Naval Forces rescue 23 tourists in Hurghada

GMT 12:56 2017 Monday ,11 December

Lyon leave it late, Balotelli with Nice winner

GMT 06:18 2017 Thursday ,19 October

Russian delegation meets with Julphar chairman

GMT 21:20 2017 Monday ,23 October

Nasr, delegation of London Stock Exchange

GMT 14:40 2012 Saturday ,10 March

Magdy Al-Galad steps down

GMT 09:47 2017 Sunday ,12 March

Cat Camp in New York attracts cat lovers

GMT 14:57 2016 Friday ,09 September

Madonna, Ritchie settle child custody dispute

GMT 23:52 2017 Monday ,18 September

UAE economic growth boosting logistics sector
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday