Gold is creeping higher
Over the last few months, the financial headlines have been full of what’s happening with the oil price. Since June, the price of oil is down over 50%
But investors are starting to turn to gold
as uncertainty drives them to its safe haven status. This move back to the yellow metal helped gold producers on the JSE soar yesterday
Have a look at the chart below of the gold price…
You can see that it hit $1,195 in December 2013. It gained until March last year, then hovered around that level until the middle of 2014.
In November last year, the world’s largest gold-back exchange traded fund, SPDR Gold Trust ETF, saw its holdings at six-year lows. This coincided with gold hitting its lowest level last year.
Was November 2014 the turning point for gold?
From this point, gold started to rise, despite a strengthening dollar.
Even news that citizens in Switzerland voted against
its central bank holding more gold hasn’t held it back.
India then scrapped its import restrictions on the yellow metal. This helped push the price higher as the Indian traditional wedding season got underway.
As well as demand from India expected to remain strong, so is demand from China.
Since November, gold has risen 7%.
With these fundamentals in place, as well as the move to gold in the current climate, gold looks set to rise back to around $1,400 to $1,500 by the end of this year, Peter Krauth in Money Morning US explains.
If you don’t hold gold in your portfolio, it might be worth reviewing this decision. Gold is a good portfolio diversifier and provides you insurance against a financial crisis.
So there you have it, why 2015 could see gold enter a bull market.
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