The gold price is moving higher again today for the second day in a row as doubts linger on the Future of rate hikes from the US Federal Reserve.
Analysts predict that the gold price will be driven in the nearest future by the Fed as they attempt to lift interest rates which is negative for gold as the US dollar becomes attractive as a high yielding investment.
How many more rate rises there will be is anybody’s guess and the economic data released over the next month or so will be closely monitored by the market to see if it warrants a rate hike,
“Investors are waiting for any clues on whether the timing of the next rate hike is September or December. The economic data coming out of US over the next two months will be crucial,” noted Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong
“The easing in dollar prices, especially its weakness against the yen is supporting gold” he added.
From a technical point of view gold is also looking attractive and if it manages to break through a critical key level further gains are expected,
"Medium- to long-term we still believe it is only a matter of time before the downtrend from 2011 is proper broken. A confirmation of that would be a break above $1,296, which currently act as a double top. We maintain our end of year forecast of $1,325 with the price risk being skewed to the upside," he added.
Dr Marie Owens Thomsen, global head of Economic Research for Indosuez Wealth Management
"We believe that a small percentage of almost anybody's portfolio would do well to be invested in gold. However, we are not thinking that it will be the best-performing asset necessarily. We like to say that investors should own some gold not to become rich but to remain wealthy," she added.