New York/London: International analysts have predicted that the uncertainty at the economic level and the heavy purchasing of Gold by the Central banks of various countries, will make the Gold rates jump to a whopping $1,400 per ounce. (1 Ounce = 28.5 Grams). Martin Huxley of INTL FCStone group claimed that the policy of the US central bank, is also a major factor, in the Gold price rise and the Gold rates will increase, in the second half of the year.
Gold was being traded at $1,286 per ounce, on Tuesday. This increase, after a consistent decline over the last few days, enthused the market. Against this background, Huxley the chief of the precious metals section at the INTL FCStone group has predicted this price rise. Huxley claimed in his statement that the global recession, policy of the US Central bank, Gold purchase by various central banks, US-China Trade war and other geopolitical issues, will have its effects on the Gold rates.
The US central bank has indicated that there cannot be any increase in the lending rates, in this year. This can reduce the demand and investments, in the US dollar. The dollar rate will decline, and this certainly can affect Gold prices. Huxley pointed out that till now, the dollar rate and Gold rate have always been inversely proportionate and therefore if the value of the dollar declines, the Gold rates will increase.
Since the last few years, countries in the world, like Russia and China have reduced their investment in the US dollar and have increased their Gold purchases consistently. As per the information given by the Russian central bank, the country has taken its Gold reserve, to 2,149 tonnes with a purchase of 31.1 tonnes, in February. The Chinese central bank also has taken the country’s Gold reserves, to 1,885 tonnes, with consistent purchases over the last four months.
Along with Russia and China, the central banks of countries like Poland, Hungary, the Philippines and also India, are purchasing Gold on a large scale. Last year, the leading central banks of the world have purchased a whopping 650 tonnes of Gold. Huxley also claimed that this purchase would reach a thousand tonnes, in the next year or two. He pointed out that this increasing buying, will increase the demand for Gold and this will have a positive impact, on the Gold rates.
Martin Huxley, a senior official at INTL FCStone group,pointed out that US-China trade war, Brexit and the international economy treading the path towards a recession, will also prove to be important factors, in the increase in Gold rates.
Before this, in January, Jeff Currey from the leading financial institution, Goldman Sachs, had predicted that the Gold rates would touch a record high of $1,425 per ounce, by the end of this year.