LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines to Launch New Website

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA


GoldSeek Web

What does the future hold for gold?

 -- Published: Tuesday, 8 July 2014 | Print  | Disqus 

By Patrick Foot, financial markets writer at IG. To take advantage of gold movements, learn how to spread bet on gold prices with IG.


So far, 2014 has been an interesting time for investors in all major markets.


Forex traders are seeing usually hyperactive currency pairs quieten down. Equities markets have stabilized and are growing, but with seemingly little reason for a change of behaviour. In commodities, a period of increased global instability has not yet translated fully onto the markets.


The unpredictable, unfathomable movements of other assets have had many commentators predicting an imminent boom for stable investments, even as appetite for risk grows ever faster. But what’s really going on across the markets, and what impact will that have on gold?


GBP/USD, EUR/USD, EUR/GBP and USD/JPY have all seen far less volatility in the first six months of 2014 compared to the first six months of last year. In USD/JPY, last year saw over three times as much spread between the highs and lows of the currency; in EUR/USD it was double and it was 76% and 65% more in BGP/USD and EUR/BGP respectively. Even in the realm of exotic pairs, USD/HUF has been 60% less volatile this year than last.


This has been down in part to the reluctance of most major economies to raise interest rates and end tapering, a course of action that has actively weakened currencies to combat low inflation: in spite of increasing signs that economic performance is improving in several countries. The USA has seen unemployment falling and non-farm payrolls figures that point to a boom after the slump brought about by an earlier cold snap. Over in Great Britain, the housing market is picking up speed rapidly.


Of course, an overly calm forex market is not likely to inspire many investors to turn towards gold.


But as rate rises become increasing likely, and with the Federal Reserve indicating that loose monetary policy is here to stay, we might see some more forex volatility before the year is out.


Much has been made of the stunning performance of US indices in recent months, with the steady undulating progress of 2011-12 turning into a straight line upwards. Both the S&P 500 and the Dow Jones have posted just three negative months since the beginning of 2013, and both indices have so far been defying the warnings of bears with impressive consistency.


Of course, wariness is an understandable and probably commendable position to take when markets are trading at over 20% higher than their previous peaks. The longer this run of good form and good news from the US economy continues, however, the more those investors will be persuaded of this strong performance’s legitimacy.


It would not be wise to discount other markets, however. The DAX has also been impressing of late, reaching a record €1000 high last month after growing 27.2% in the last 18 months (actually slightly more than the Dow did in the same time frame).


Recent developments have only confused matters further, as an incredibly strong non-farm payrolls report contributed to a fillip for the US dollar and US indices. The view held by many that indices are popular only as long as interest rates look set to remain low (backed up by the fall in the FTSE after Mark Carney signalled a possible rise in June), has not played out.


The simplest view to take is that this is an unsustainably bullish market, set for a major correction to bring a measure of normality back to markets, see gold rise swiftly again, and kick the forex markets back into action. But there are more complicated factors at play. Many commentators are suggesting emerging markets as the safe haven in case of a US retracement, and the lack of a definable ‘boom’ vertical like mortgages or tech suggests that this stock market is not a replica of those in previous decades.


So the future for gold is increasingly hard to determine, and like so often in the past relies on what occurs in the other major asset categories. For those who are confident enough in their predictions for market movements coming up, a great deal of money could be made – or lost.


Spread bets and CFDs are leveraged products. Spread betting and CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.


This information has been prepared by IG, a trading name of IG Markets Limited. The material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


| Digg This Article
 -- Published: Tuesday, 8 July 2014 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.