Gold, the world’s favorite precious metal, has known quite some volatile times recently. The metal caught the market’s attention for a multitude of reasons we will discuss in the following article.
The good thing is that the yellow metal is back on everyone’s radar, a place where it should have been for quite some time now. If you want to invest in Gold in 2016, here are some things you need to know
Performance in 2015
2015 was a rough year for the commodity. In the beginning, Gold went from height to height, profiting from a less than ideal situation in the U.S. and an overall lack of trust in global economics.
As things looked better and better in the U.S. job reports, and culminated with the Fed rate hike in late 2015, Gold prices took a turn for the worst and ended up bottoming twice around the $1044 price, the lowest in quite some time.
It is very close to the key $1000 level which has held very well in recent years, but we’ve yet to see it seriously challenged. Maybe in 2016?
The reverse correlation between the U.S. Dollar and Gold is quite well-known. The reason for this is that Gold is often viewed as a safe haven for investors. When all the other markets know too large volatility or sub-par performances, investors turn towards the precious metal as a safe vehicle to store their assets in.
What is happening to gold in 2016?
The beginning of the year marked some very good performances for the metal, currently sitting at around $1200 an ounce. This good performance is based on a number of reasons, but the most important ones are the lack good economic data from the U.S., which can seriously delay new Fed rate hikes, as well as a global commodity crisis.
The Fed was thought to raise the main interest rate 3 or 4 times during 2016, but new data suggests that it might only happen once, or not at all. The key Fed meeting will take place during 15-16 March, and chair Janet Yellen will give a testimony after.
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While this is happening, global commodities and markets are going from low to low, with Oil prices being the main driver for sub-par performances in Europe, Asia and emerging economies.
Other currencies which used to be regarded as safe havens, like the Yen, have also seen bad performances as of late.
Where to go from there?
At least until mid of March, Gold should see a steady increase every week. The $1200 line is showing good signs of support, and the fundamentals are all aligned for some good performances for the precious metal. Be advised, though, that the Fed meeting could change everything on the board (again) so be prepared to re-balance your portfolio shortly before or after.
Of course, this is a market analysis which most of the analysts agree with, but it is still just an opinion. If you want to find out more information and maybe even spark up a debate, share this article with your friends and followers and join the investing discussion regarding Gold. You might come up with some great ideas which will net you a serious amount of money in 2016!
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