Gold prices could drop to $1,000 an ounce in 2015 as a strong US dollar is expected to mount further pressure on the precious metal.
As many as seven out of 10 analysts polled in a Kitco Gold Survey said they expected gold prices to fall to $1,000 an ounce in 2015.
More survey participants said it was possible for gold to drop to $1,000 given that the metal continued to trade below the 200-day moving average of $1,268.
US Global Investor’s CEO Frank Holmes told Kitco that noted economist Nouriel Roubini’s 2013prediction that gold will drop to $1,000 an ounce before the end of 2015 may be right because the level was “within the normal DNA of volatility of gold”.
The strong greenback will cause “prevailing pressure” on gold prices in 2015, Holmes added. Demand for dollar-denominated commodities such as gold typically weakens on a stronger greenback as it makes the metal more expensive for holders of other currencies, lowering its hedge appeal.
But Axel Merk of Merk Investments said the only scenario where Roubini’s call could be right was if investors see a “very hawkish” US Federal Reserve, adding that he did not think rate hikes will equate to a hawkish Fed. >> Read More