The precious metals market has been no stranger to the news this year, but what might the forecast look like for gold and silver in particular? Chief Numismatist at U.S. Money Reserve John Rothans recently reviewed several price forecasts to help you understand what 2018 has in store for the precious metals market. Known as “America’s Gold Authority®,” U.S. Money Reserve is an industry leader in precious metals. So what should you watch for in 2018 as far as gold and silver are concerned?
First, How Did Gold Perform in 2017?
In 2017, gold prices held relatively steady. While other precious metal prices on the market were volatile, gold grew in price steadily throughout the year. There was a brief moment of turbulence in September due to a geopolitical crisis, but apart from that, the price of gold held and grew with surprising resilience to the anxiety that was prevalent in the world’s economy throughout the year.
“While brows furrowed over the rise of bitcoin and North Korean missiles, gold kept its cool and steadily moved ahead in 2017,” explained John Rothans of U.S. Money Reserve.
What do industry analysts predict might be in store for gold in 2018? Here are some gold predictions:
- Sharps Pixley, a London bullion trader, predicts lows of $1,260/ounce and highs of $1,400/ounce.
- ABN AMRO, a Dutch bank, predicts the price to be $1,400/ounce by the end of the year.
- PRICE Futures Group predicts averages of $1,400/ounce and highs of $1,500/ounce.
- Goldman Sachs predicts lows of $1,200/ounce in the middle of the year, returning to $1,375/ounce by December.
- TD Securities predicts averages of between $1,313 and $1,325/ounce for the year, with higher prices toward the end of the year.
- Macquarie, a global banking group, predicts highs of $1,400/ounce.
Overall, these predictions point to the potential for gold prices to reach—and potentially exceed—$1,400/ounce for the first time in five years. The disagreement between analysts seems to be about when the peak in price will occur. Like any other financial asset, gold can be subject to sudden fluctuations in price. Listed below are areas of interest to keep in mind and help you determine when could be the right time to buy gold.
Trends to Consider
The growth of global income
As global incomes increase, so does the demand for gold. When populations become wealthier, they look to buy more jewelry and technology in which gold is a major component. With growth in wealth expected in China and India, coupled with expansions on the horizon for the U.S. and European economies, there is a high potential for gold prices to grow.
Constraints on the supply of gold
For the moment, current rates of gold production are likely to remain constant. However, some signs indicate that the level of gold mining and extraction is going to slow down, and with few new gold mines appearing in the future, the production of gold may begin to drop. This could lead to an increase in the price of gold because of the decline in supply.
The U.S. dollar
The U.S. dollar is in the weakest position it has been in for a long time, and some analysts do not predict it gaining strength throughout 2018. Typically, a weaker dollar means higher gold prices.
Heightened global tensions are typically a catalyst for gold purchases. There is potential for international conflicts to arise in North Korea, the Middle East, and Europe, all of which could lead to a rise in the price of gold.
Ease of access
Gold has become a more readily available asset to potential buyers in recent years. Islamic financial institutions have accepted gold as an acceptable commodity since 2016. India is planning to develop a new gold exchange. Updates are pending to the Russian tax code that could make gold more affordable to purchase. And new legislation in a number of U.S. states is allowing for the use of precious metal currency in place of dollars. With so many new buyers having access to the market, the price of gold could be set to rise in 2018.
2018 Silver Forecast
In 2017, silver prices were volatile. High prices for silver in the summer were followed by a steep crash. The general expectation for 2018 is that silver prices could be set for a steady rise throughout the year.
“While silver buyers shouldn’t expect fireworks for silver prices in 2018, the general sentiment among analysts is that silver prices will remain steady, if not steadily increase throughout the year,” explains John Rothans of U.S. Money Reserve.
Here are some predictions from experts on what to expect when it comes to the price of silver:
- Sharps Pixley, a London bullion trader, predicts averages of $18.08/ounce, with lows of $15.60/ounce and highs of $19.10/ounce.
- HSBC, a multinational bank, predicts steady increases, to an average of $17.92/ounce by the end of the year.
- CIBC World Markets predicts end-of-year prices between $17 and $18/ounce.
- Goldman Sachs predicts that for the first six months, prices will remain steady at about $16/ounce and then begin a steady rise to $17.20/ounce.
- Bank of Montreal makes the most optimistic prediction, anticipating prices rising to $19/ounce.
According to many experts, silver prices could see an increase in 2018. Here are some issues you should keep an eye on if you are planning to purchase silver this year.
Trends to Consider
The supply of silver
Experts disagree about exactly what is going to happen with the amount of silver on the market. Some sources predict a surplus of silver, and at the same time, others predict a deficit. Keep an eye out for announcements of any discoveries of silver deposits, as this would signal that there is likely to be a surplus of silver during the year, which could lead to a drop in the price of silver.
The growth of industries reliant on silver could lead to an overall increase in the price of silver. The solar power industry (particularly companies developing photovoltaic cells) and the electronics industry are two major silver consumers, for example.
Coins and jewelry
The Silver Institute is projecting an increase in demand for silver jewelry and silver coins. The appeal of silver for use in jewelry is broad as silver is a versatile option that is more affordable than gold.
Takeaways on Gold and Silver for 2018
The tumultuous state of the world can lead to stock market fluctuations throughout the year, which can make investing in stocks a risky proposition. But gold and silver could prove to be a trustworthy and stable choice. The most important trend to keep an eye on is the state of the U.S. financial markets. Rising interest rates and changes to the Fed’s policies could have significant effects on the prices of gold and silver. So before making any transactions, check U.S. financial news and monitor related fiscal trends.
Read more about the U.S. Money Reserve: https://www.dailyforexreport.com/u-s-money-reserve-legacy-5-gold-american-eagle-coin/