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Gold Price: Market Forecasts for 2018

If you’re an investor looking to get the most out of the gold market, then it certainly helps to have an idea of where the gold price is headed over the next year. While nobody can give you a definitive answer, there are a few pretty clever people out there who can take an educated guess, based on economic indicators that have historically influenced the gold price in one direction or another.

Here are just a few of the big names in the gold market, and what they have to say about where the gold price is likely to go in 2018.

Gold price prediction from Goldman Sachs

Goldman Sachs recently raised their three, six and 12-month 2018 gold forecasts. The three month target rose from $1,200 to $1,260, the sixth month from $1,180 to $1,261, and the 12 month target from $1,150 to $1,250, as reported by Market Realist. These prices are given as the predicted value of one troy ounce of fine gold in American dollars

Goldman Sachs thinks that the threat of rising US interest rates looks likely to depress the gold price over the next few months. But the investment giant has also indicated that this effect will be lower than expected, and will be offset by a number of other economic indicators:

  • Lower than expected returns on US equities.
  • Income acceleration in emerging markets, which will boost gold prices.
  • Reduction in supply from gold mines compared with 2017.

The World Bank’s gold price prediction

The World Bank has predicted that the expected rise in Federal Reserve interest rates will depress the level of gold prices going into 2018.

They predict that prices will reduce by an average of one per cent over the course of the next year.

Royal Bank of Canada

Writing at the end of 2016, The Royal Bank of Canada considered itself ‘cautiously optimistic’ about the price of gold for 2017 and 2018. It indicated that ‘macro headwinds’ are likely to hold back the prices somewhat which will be narrowly made up for by the safe-haven buying phenomenon that is likely to be caused by political uncertainties.

They do however caveat that the gold price may increase if geopolitical uncertainties begin to develop into further crises. As an example of one of these, the bank cites fears of a ‘trade-war’.

Their 2018 price forecast has the gold price averaging at $1,303 throughout the year. In general, the bank predicts modest rises across 2018, largely following trends seen in 2017, but noting no major shifts in the market, outside of a crisis.

Eugen Weinberg – Commerzbank

In an interview with German publication Focus, Eugen Weinberg, a market analyst at Commerzbank remarked that he expected the gold price to rise to $1,300 per troy ounce by the end of 2017, with a further hike up to $1,400 by the end of 2018.

Weinberg says that geopolitical uncertainties will continue to inflate the gold price through 2018, making reference to the financial crisis of 2008, the Eurozone crisis of 2010-2012 and the results of the Brexit Referendum in 2016, as three examples of how gold prices have risen substantially over recent years as a result of global and political instability. He thinks this political instability will continue through 2018.

The analyst also cites monetary policy, inflation and current economic developments as further contributors to political and economic instability moving into 2018.

Alessandro Bruno– Lombardi

Paying much more attention to the ever increasing political uncertainty, Bruno thinks the price of gold is likely to reach similar levels as Weinberg’s prediction, at around $1,400 per ounce. Writing for Lombardi, investor Alessandro Bruno cites geopolitical concerns like the uncertainty of the UK economy through Brexit negotiations, the increasing strain of migration into the European Union and tensions between Russia, the US and North Korea, as concerns that could potentially inflate the gold price through 2018.

Like other forecasts Bruno’s outlook seems sure that the market will withstand the pressures that a rise on US interest rates might impose, and that the demands for ‘safe-haven’ buying in gold will further increase its price.

What is ‘safe-haven’ buying?

Many of these predictions make some kind of reference to the ‘safe-haven’ phenomenon, usually in connection with political uncertainty or geopolitical tensions. During times of particular political or economic uncertainty, investors often turn to gold because, as a reliable and trusted investment, it has a proven track record of protecting and even enhancing wealth during these periods. Therefore, the demand for gold increases, and with it so does the gold price. You can read more about this in our guide to historical gold price trends here.

We’ve seen uncertainty around the tensions in North Korea drive up the price of gold recently, along with the political crisis in Catalonia, which is being seen by investors as being representative of an unstable European Union. And of course, gold continues to rise as politicians fail to demonstrate a clear accord when it comes to the UK’s departure from the European Union.

Will 2018 be a good time to buy gold?

Though we now live in the infamous post-expert world, it is absolutely worth listening to those that understand the inner working of the gold market when deciding what your investment plans are going to be for the coming year. As uncertainty builds, the consensus seems to be modest to significant rises in the gold price across the coming 12 months.

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