The Strategist

Analyst: Gold can reach $ 1,5 thousand for the first time since 2015

06/27/2017 - 12:11

Prices for gold increased by about 8% compared to the same period last year.

This is not surprising for Frank Holmes, chief executive officer and chief investment officer of U.S. Global Investors. He sees many reasons why prices can grow further - potentially up to 1.5 thousand per ounce. This will be 20% higher than the current level of about $ 1,250.

In fact, a positive outlook for gold is the key reason why U.S. Global Investors, whose Gold & Precious Metals (USERX) fund has a 4-star rating from Morningstar, is planning to launch its first gold deal this week.

According to Morningstar, USERX is among the top ten performers in the precious metals market on the basis of its cumulative yield of -7.3%. Gold futures rose 8.6% last year, but from 2012 to 2015, losses amounted to about 37%.

"The metal reacts to typical demand drivers, which I always discuss, such as geopolitical uncertainty, a weak dollar and low interest rates," Holmes said. "Perhaps one of the most shocking developments is that last week gold outstripped the US dollar for the first time since November [after the presidential election In the USA]."

Gold futures fell to $ 1,250 an ounce on Monday, but they rose 8% compared to last year. They have not been traded above $ 1,500 for more than four years.

According to Holmes, weakening of the dollar occurs against the backdrop of the disruption of Donald Trump's political agenda. This factor has become one of the most significant influences on the gold market.

Geopolitical risks and uncertainties, including Brexit, Trump and tensions in the Middle East, give gold an additional impulse, believes the expert.