Gold Price Forecast: Are We Looking At A Rare Buying Opportunity?

Friday, June 16, 2017

fine gold

If the last few years have revealed any truth about gold, it’s that the yellow metal is resilient. Though recent memory had prices in just triple digits, it’s been above $1,000 for so long now that it seems as if the price will never look back. But with a dip in precious metals this week after the Federal Reserve announced its decision to rate interest rates for the fourth time since the Great Recession, we have to ask ourselves whether this is as low as gold might go in the foreseeable future. Might gold’s price be a unique buying opportunity as it stands now, at the end of the second fiscal quarter?

Buying Low And Selling High

This week, gold returned to the mid-$1,200 point, at which it has spent so much time in 2017. There is some optimism out there that this may be as low as gold goes, give or take. CNBC quotes Jim Iuorio as insisting there is plenty of long-term optimism in gold to be had, even though the trip throughout June and recent months has been somewhat rocky. According to Iuorio, the dollar may eventually go down once again, which in turn would lead to a surging price for gold, so long as gold stays approximately where it is right now—above the $1,235 mark.

If that’s the case, then buying now could potentially be a case of buying the dip, especially if you believe Iuorio and others who insist that long-term indicators look strong for the precious metal.

Forbes Sees “7 Signs” For Adding Gold To An Investment Portfolio

A guest post by Oliver Garret, a writer for the Hard Assets Alliance, also sees plenty of reasons to think about adding gold to portfolio—seven of them, in fact. With gold up some 10% on the year, this short-term dip isn’t as drastic as some think.

Garret points to a number of signs. As was pointed out in this space just recently, interest rates still remain near record lows despite the fact that it’s been going nowhere but up in recent years. After all, interest rates have very little move to room but up. Garret also points out to the meager returns currently available in bonds, which is typically a competing hedge investment for those who believe they have too much money exposed to the stock market.

Watching For The Signs Of Gold’s Longer-Term Bull Run

What will it take to see gold take off again, the way it did a year ago when Brexit shook things up? There is certainly the U.S. dollar index. Though it has been looking strong as of late thanks to the recent economic news, it remains perhaps the strongest indicator for where commodities like precious metals may end up heading.

And with Garret pointing out that even stable investments like dividend stocks don’t offer the returns that they once did, investors may look for ways to diversify their portfolio in uncertain economic times. One thing is clear: this could make for a very interesting summer—and beyond—when it comes to the price of gold.

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Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at [email protected].