Gold News: Will Gold Recover in 2016?

The downtrend of the price of gold is expected to continue into 2016. The price currently stands at $1071 an oz which is the lowest it’s been at the end of the year since 2008.


The decline of gold’s value this came from the  U.S. federal reserve’s  decision to  increase the interest rate in nine years. A higher interest rate strengthens the dollar, which lowers the price of gold. The fed only raised the interest rate by 0.25%, meaning that they are expected to continue to raise it incrementally over the course of the next year.

Most analysts see gold dropping below $1000 in 2016, and even falling  as low as $900.  There are some analyst that see gold increasing in 2016 due to slow economic growth, which would lower inflation, and weaken the dollar.

It’s not impossible as gold did make a small $15 rise last week after a data report showed slower U.S. economic expansion in November. Slower expansion would lower inflation and help gold. The financial service, Credit Suisie has a pessimistic outlook on the U.S. economy in 2016 and believes it will help gold’s price climb up all the way to $1100 in their 12-month forecast.

In general though, it’s difficult to see what will happen to the economy as a whole. What we do know is that the federal reserve is likely to continue to raise the interest rate in 2016, which is bad news for gold.

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