Gold News: Precious Commodity Surges In 3 Months

Gold News

Gold prices have risen over the last few months, in accordance with the I Know First algorithm’s prediction, as investors look for a safe-haven for a variety of factors. Fears of a global economic slowdown, political instability in Greece, the Russia-Ukraine crisis, and the move by the Swiss National Bank to remove the franc’s peg against the euro have all supported gold over that time, causing it to outperform other assets. Fourth quarter demand for the precious commodity also rose 6% from the year-earlier quarter, after falling earlier in the year.

Get Daily Forecast For Gold

gold news

European regional growth has been lackluster, unemployment is high, and consumer prices across the Eurozone fell on an annual basis for the first time in five years. The region’s inflation of -0.2% is below the central bank’s target of 2%. The European Central Bank (ECB) is trying to revive Eurozone growth, and buying bonds is one way to do so.

The ECB president Mario Draghi announced an open-ended bond-buying program worth 60 billion euros a month as part of its quantitative easing program. Fears over a deflationary trend in the Eurozone have increased the demand for gold. Gold prices strengthened after the stimulus plan was announced. The commodity was also helped after other central banks cut their key interest rates to counter the impact of the ECB’s quantitative easing on their currencies.

Speculation that Greece could abandon the euro has further boosted the appeal of precious metals including gold. Greece’s economy has shown subdued performance over the years, and is now seeking a bailout extension. This will only occur if it agrees to austerity measures that are a heated debate in Greece. Concerns that the new political leadership after snap elections will exit the Eurozone has led to market uncertainty, making gold more attractive.

Fighting between Russian and Ukraine over the Crimean peninsula continues to support gold. Besides the volatility in markets caused by the fighting, investors are also considering the uncertainty over the solvency of Ukraine, while Russia is currently teetering on junk bond status. The potential worst-case scenario, where Ukraine or Russia default on their loans, would cause further damage to an already struggling Europe and its financial industry.

Investors also poured into gold after the Swiss National Bank caught investors off guard by removing the franc’s peg against the euro. The euro fell 14% against the franc after the announcement, in an unprecedented move for a major currency. The volatility in currencies after the move led investors to invest in gold as a safe haven against currency losses.

2:16 forecast

I Know First correctly predicted that the price of gold would increase in the “Gold Outlook” forecast from November 11th, 2014. The forecast had a bullish outlook for physical silver, physical gold, and the Gold ETF for the three-month time horizon. All three increased in accordance with the algorithm, with the physical gold price increasing 6.66% over that time.

Comments are closed.