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Pundits Predict Continued Rally for Precious Metals

Anthony Allen Anderson

Updated: March 21, 2022

precious metals
Editor’s Note:

As gold futures reached their highest level in three weeks, several experts predict that gold and other precious metals will continue their rally into 2017. At a recent Bloomberg event that took place in Mumbai, Templeton Emerging Markets Group shared their expectation that gold may advance up to 15 percent before 2017 is over.

U.S. equities continue to fall, setting the stage for precious metals to soar as investors seek safe havens. The weakened dollar and the Federal Reserve’s slow move to increase interest rates has fueled demand for bullion. Yet even if the Fed increases interest rates, this does not ensure rebounds for falling domestic equities.

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With the United States presidential election a mere two weeks away, uncertainty among investors continues to grow. Loose monetary policies coupled with the continued fallout from the Brexit referendum continue to boost the appeal of precious metals. When the United Kingdom voted to make its exit from the European Union in July, the price of gold surged to $1,375.34. This was the metal’s highest price since March 2014.

Year-to-date, bullion has risen 19 percent, ending a slump that started in 2011. Templeton Emerging Markets Group’s Executive Chairman Mark Mobius told Bloomberg that the dollar is not that strong and may decline further. This will most likely buoy the price of gold products and other precious metals even more.

As traders and investor search for clues that the interest-rate increase will happen by the end of 2016, other factors are affecting the price of precious metals. The Hindu festival of lights, called Diwali, begins on October 30, just a few days away. For more than two decades, this annual event has driven demand for gold up in India. Expectations are for the same to occur this year.

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