The price of gold has been undermined this year by the strength of the dollar and rising bond yields as the first hike in US interest rates approaches. Indeed, we continue to expect one more dip from current levels of around $1,155 per ounce as the Fed presses ahead with a September lift-off.
However, we believe that demand and supply fundamentals remain solid and expect prices to recover further once markets have digested the first Fed move. (Our forecasts are $1,050 for end-Q3 and $1,200 for end-Q4, with further gains to as high as $1,400 in 2016.) In this Precious Metals Watch, we discuss the current state of the gold market and analyse trends in supply and demand that should determine prices in the coming months.
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