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The factors that determine the price of gold as it looks to be more volatile
Wednesday, 21 March 2012
Gold prices have not kept up on a flying start when the stock market
opened this year. According to analysts, the price of gold is in an
In the second half of 2011 gold price ran from about $1,500 per ounce
up to up to level $1,921 per ounce. Since then it has fallen back to
current the levels around $ 1,650.
This past month seen the price of gold backed down nearly 5 percent
increase since year-end and now add up to "only" 5.5 percent.
"In recent months the stocks and shares have actually outperformed
commodities such as gold and there is a clear sign that such optimism
dominates, "said Filip Petersson, commodity analyst at SEB.
As brighter noises from the U.S. and reduced concerns over Europe's
debt crisis continues, investors are moving their money to other
assets. But according to SEB analysts, merchants are groping for
something to stick.
There is not really much focus on gold market - like many other markets
there see to be a search for something to focus on according to Filip
SEB has lowered its expectations for the price of gold. But Sweden’s
central banks' generous monetary policy means that the bank in 2012
still trails an average on gold price of $ 1,800, but with a possible
peak of the previous price record of $ 1,921.
Then according to SEB, the price of gold will fall as economic recovery gathers pace.
"We believe there is still a pretty good support at this level, "said Filip Petersson.
Filip Petersson points out the real interest rate as the single most
important factor. Increases in interest rates while inflation stays on
the abyss would be negative for gold prices.
"This is probably the gold rally we've seen over the past decade. This
would also mean that production responds further to the high prices,
that risks becoming even worse, "said Filip Petersson, referring to the
interest for the extraction of gold which has risen with the price rise.
By Scancomark.se Team
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