GOLD SURVEY 2018: WHAT WILL BE THE AVERAGE PRICE OF GOLD THIS YEAR?

The Gold Survey 2018 report, published on May 8 by GFMS (Gold Fields Mineral Services), clearly indicates that those investing in gold have reason to be happy this year. The price of gold is expected to rise to its highest level in five years.

Record gold prices

According to GFMS researchers, the factor that will determine the record result for gold will be the sense of uncertainty and destabilization on the political and economic front. The mood of anxiety will translate into increased demand for investments in physical gold, leading to an 8% increase compared to 2017. The projected average price for the year could reach as high as $1,360 per ounce.

Uncertainty surrounding US President Donald Trump's policies, combined with tensions in the Middle East and Brexit negotiations, will remain the main drivers of gold prices.

– explain GFMS analysts.

Retail transactions will play a significant role in the anticipated growth. After four years of decline, we can finally expect a breakthrough in this area. The surge in demand among retail customers will be driven by rising price expectations and a general increase in confidence in gold.

Demand for gold bars will increase by 1%. As for coins, GFMS experts do not expect almost any change.

However, the most interesting thesis put forward by GFMS experts concerns China. The report indicates that in 2018, China will significantly increase its gold reserves. If these predictions prove accurate, these will be the first official purchases since October 2016. As a result, demand from the public sector will increase to over 400 tons.

Gold supply

Although last year ended with a decline in mining production, the first since 2008, according to GFMS experts, 2018 may bring record production of 3,265 tons. This forecast is based on observations from Asian countries as well as Russia, Australia, and Canada.

What was 2017 like?

The year 2017 filled investors with optimism – there was a ten percent increase in demand for physical gold, which is the first increase since 2013. No wonder, then, that GFMS experts base their forecast on last year's results.

The biggest surprise was the increase in gold jewelry production. Although in recent years the jewelry industry has been by far the weakest of all gold-related sectors, last year saw a long-awaited increase (+13%). According to GFMS analysts, the situation in this sector was positively influenced primarily by increased demand in India, caused by a change in the goods and services tax rate.

In contrast, the second country famous for its love of gold jewelry saw a decline. We are, of course, talking about China, where overall demand for physical gold fell by 3%. The analysis shows that we can expect a similar result this year.

Source: InvestingNews.com