Have we seen the last of the rally in gold?


The end of the year is soon and many believe that the rally in gold had already shown its potential. Yet, some investors say the bullion will rise again. Will the yellow metal soar this year?

17 October, AtoZForex According to Bart Melek, the Head of the commodity research at the Toronto-Dominion Bank, gold prices are expected to rise to as high as $1350 an ounce in the next year.

Is there more for the rally in gold?

Mr. Melek believes that the expected soar in the prices of gold is going to follow the drop below the $1200, which is about to be caused by the Federal Reserve (Fed) interest rate hike in December. The Gold futures were changing hands at $1256.40 on the Comex in New York this Monday.

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The demand for gold is expected to diminish due to the higher borrowing costs and the stronger dollar, as it is reported by Mr. Melek. Further, the demand is expected to recover as real interest rates will be low, causing the competitive trend for gold.

The London Bullion Market Association and London Platinum & Palladium Market annual conference is taking place now in Singapore from the 16th of October, and it is about to finish by tomorrow. The speakers at the conference believe in the positive outlook for gold. The yellow metal will gain as the market realizes traditional measures are not successful when it comes to the monetary policy, according to the portfolio manager at Blenheim Capital Management, Terence Kooyker.

Investors should increase gold in their portfolios

In addition, traders are recommended to increase the share of gold in their portfolios, according to Ray Eyles from Millennium Capital Management. Eric Robertsen, the Head of global macro strategy and Forex research at Standard Chartered Bank believes that the bullion even at zero interest is a high-yielding asset these days.The yellow metal gained as much as 25 percent in the first half of 2016 on the Fed’s inaction regarding the

The yellow metal gained as much as 25 percent in the first half of 2016 on the Fed’s inaction regarding the raise of the interest rates.

Traders now expect a two-thirds chance of a 0.25 percent rate hike at the Federal Open Market Committee’s (FOMC) meeting in December, where the November rate hike chances account for 20 percent currently.

There is also a chance for decline in the gold prices due to the probability that the Fed rate hike and physical demand during the Indian festive period will be weaker than expected, as it is stated by the Head of global transaction services and precious metals at Kotak Mahindra Bank, Shekhar Bhandari.

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