Monday, November 21, 2016
Physical gold buyers looking for a bargain helped the gold price bounce back in early trade today (Monday November 21) after the precious metal fell to its lowest value in five and a half months at the close of last week.
Following a strong year of rising prices, now may be the time to buy, as gold has lost 5.4 per cent of its value during November. Analysts pointed to jitters in the market surrounding the US Presidential election and firm forecasts that the US Federal Reserve will raise interest rates at its December meeting.
ANZ analyst Daniel Hynes told Reuters that the price may slip further in the run-up to the interest rate setting meeting.
He added: “The low prices have induced some interest in the physical market. However, the dollar has got some momentum behind it and until a turnaround, it is going to be difficult for gold prices to recover.”
Gold had been expected to gain in value following the election of Donald Trump as the next US President, due to his lack of political experience. However, according to Motley Fool, his economic policies to increase growth via lower taxes and infrastructure spending have pushed investors away from the precious metal in the weeks after his victory over Hillary Clinton.
In today’s trade, gold bounced back from Friday’s low of £971.66 per troy ounce to £977.95 at 09:15 this morning. Buying in the Asian market overnight helped bullion to claw back some ground.
India, the world’s second biggest gold-buying nation, has withdrawn higher value currency notes from circulation, leading to concerns the government may reduce the amount of bullion being imported. That’s led to a surge in buying physical gold by jewellers.
With prices currently among the lowest the market has experienced for some time, it may be worth investing now to take advantage.