Gold Prices: Will they go back up?
Over the past few months, everyone has been closely following the fluctuating price of gold, and recently we’ve seen the price decline in the US.
According to TheWeek.com article, “The gold price closed at a five-month low at the end of New York trading on Nov. 22, dropping to $1,216 an ounce, according to the Wall Street Journal. Falling again in London on Nov 23, down 0.9 per cent to a shade above $1,206 an ounce.”
Two things have triggered this decline: a boost in the dollar and the likely rise to interest rates, a first in more than a decade.
According to Citibank, “America’s greenback is enjoying its fastest rise in 40 years. Over the past eight months, the U.S. dollar has strengthened dramatically against all the world’s other major currencies.”
Furthermore, Janet Yellen of the Federal Reserve recently hinted at a rise in interest rates to go into affect this year or early 2017.
As stating in a recent Nasdaq.com article, “this precious metal is sensitive to moves in the U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.”
Gold is typically considered a safe investment. Investments in the yellow metal are usually made to hedge against global economic uncertainty. Since gold, as an investment, only offers capital gains, an increase in US interest rates tends to lower the demand for gold and shifts investors to interest-linked securities. That is what we are seeing now.
In our over 10 years of experience we understand that markets are always changing. However if this trend continues gold may continue to go down, before it goes up. Which is why we don’t want you to lose money, each day, by holding onto your scrap. Request a container today here.