Gold has been in a bearish trend for the last 5 years. What are future price predictions?
With improvement in U.S. economy over a period of time fed has been considering of increasing interest rates. Now when the economy is performing well why keep a low interest investment?
Gold is considered to be an asset class investment .With increase in interest rates why keep an investment in low yield?
If we consider the consumption pattern of gold than INDIA has been the biggest consumer of gold in terms of tonnage if we exclude the financial year 2013-14.The purchase of gold in terms of tonnage has shown a decrease in terms of tonnage.
Improvement in U.S. economy may be considered as fragile as other major economies of the world are facing a down trend. The global slowdown can ultimately effect the growth and can slowdown the economy which can force the FED to hold interest rates.
Geo political tensions are good news for gold bulls. Middle East and some parts of Africa has been in a prolonged battle with extremists creating an atmosphere of uncertainty.
INDIA has witnessed a major regime change. With increased vigilance on black money which was a major consumer of purchase of gold as the taxation system allowed certain liberties the increase in purchase can be related to the performance of the agri based economy of the country. A monsoon prediction has been good and could spur investment and purchases in the near term. Import duty on gold in INDIA has been high to control $ outgo .The rates of import duty of gold could reduce with control in fiscal deficit and dollar infusion into the country.
Brexit has completely changed the demand for the yellow metal and considered very positive for gold bulls.
With Fed interest rate coming up will gold be able to hold prices?
CHINA remains a major consumer of GOLD but with the cooling of their economy will they be the biggest consumer of gold?
The YEAR 2016 holds a neutral view on gold with a positive bias.