Gold's longest downtrend stretch since 1999
The price of gold is continuing to decline, as it has recorded drops for six consecutive weeks. Even though the U.S. Federal Reserve (Fed) meeting signaled good news for the U.S. economy, the change in gold's commodity exchange value remained negative by the end of yet another week. This decreasing stretch for gold has become the longest since 1999. The spot exchange price of an ounce of gold was $1,084.60 on Friday, a 0.3 percent decrease, dropping more than 1 percent throughout the week.Gold and other commodities are more appealing to investors when inflation starts rising and when interest rates are low. When the Fed tightens up the economy with an interest rate hike, securities with fixed income become more appealing than gold and other commodities that do not return interest. Deutsche Bank analysts foresee a further 30 percent drop in gold prices in the coming months, calculating its fair value at $785 an ounce. They believe that U.S. dollar long-term real yields still have room for adjustments and that dollar markets should continue moving higher up until at least 2016.
Last Update: August 01, 2015 01:42