The gold price has bounced back today after falling for most of the last week, as some analysts are beginning to give some bold predictions as the year unfolds.
The reason the precious has performed so poorly over the last 7 days is on the back of the US Federal Reserve’s latest interest rate decision where no changes in rates were made, but was backed up by a bullish monetary statement that included hints of further rate rises.
That was followed up by US President Donald Trump’s decision to fire FBI director James Comey over his handling of THE email scandal involving Hilary Clinton, but some believe a more sinister reason was behind the move such as covering up the Administration’s connections with Russia.
It seems that gold was drastically oversold after the Fed’s speech and Trump’s shock decision, and a rebound is in the making.
"It looks like gold is following stocks and the U.S. dollar, but overall I would say it may have found a bottom, at least for the time being," noted Afshin Nabavi, head of trading at MKS in Switzerland.
One of the most bullish predictions comes from Toni Teves of UBS bank who says gold is likely to average a price of $1,350 for the remainder of the year.
"Gold allocation within a portfolio is warranted given a relatively benign rate environment, modest growth acceleration and elevated macro risks. We think further gains in gold are likely to be driven by a continuation of strategic portfolio allocation from a diverse set of investors,” he said.