2014 will end with gold prices down, rounding out three years of decline for the precious metal.
Why increasing demand in the east will not change gold prices.
What banks and analysts are predicting for 2015.
I Know First’s algorithm leans towards Goldman Sachs $1,050 price target: bearish forecast for the short, medium, and long term time horizons.
Summative Analysis
The US dollar is now at a level not reached since the aftershock of the financial crisis; this has big consequences for gold (GLD). In just 5 months the US dollar index rose from 80 to 88.5, a 10% increase, notable for any currency in such a short period. Although long gone, the gold standard still holds a strong psychological influence today. This impact shapes policies and trades implemented by banks, and investor perception. When the US dollar is in trouble, global banks and investors like to buy gold. When the US dollar strengthens, more gold can be bought for fewer dollars, thus they shift their focus back into currency, lowering gold prices even farther. The economic crisis was the latest strong trigger for renewed interest in gold as a safe harbor investment.
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