Experts across the board are optimistic about increasing gold prices and the potential to reap significant returns. Some predict that the gold price target for 2016 could soar up to $1450 in coming months. With gold products trading at around $1261 per ounce earlier this week, that number doesn’t seem too far out from reach.
Gold prices have been surging since December—increasing around 17 percent over the last four months. While predicting future prices is tricky, most investors and experts are bullish on the future of gold products for a variety of reasons based on much technical analysis.
One major indicator is that Central Banks across the globe are buying more gold than they’re selling. In fact, during the first quarter, major players such as China and Russia led the pack on a buying spree that hasn’t slowed down—several experts predict that China’s Central Bank alone will buy nearly 215 tons of gold in 2016.
Growth in the Near Future
HBSC Murray Gunn, the Head of Technical Analysis for HSBC Bank, one of the largest banking organizations in the world, believes gold has bottomed out and is bearish on his outlook for growth in the near future. His expert analysis is based on an assessment of group behavior called the Elliot Wave Principle, discovered by Ralph Nelson Elliott in the 1930s. The Elliott Wave Principle shows how the masses naturally go back and forth from optimism to pessimism. That behavior best exemplified in the financial markets all around. When you identify the patterns of investor psychology by following price movements, you can get a good estimate of where prices are headed.
Another factor affecting the price of this precious metal is that gold companies are allocating less money for gold exploration—and we all know what happens if demand continues to rise and supplies diminish.
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