Gold And Silver In Store For ‘Short-Term Pain, Long-Term Gain’ – Capital Economics – by Anna Golubova (Kitco News – July 30, 2018)

(Kitco News) – Precious metals investors need to prepare for lower gold prices in the next few months, with things only picking up next year when gold rallies to $1,350 an ounce, according to Capital Economics.

Gold continues to sulk in the summer months, trading near 12-month lows, with strong U.S. dollar and lack of major fundamental news keeping the metal under pressure. As Asian markets opened on Tuesday, spot gold on was trading at $1,221,20, up 0.02% on the day, while August Comex gold futures were last seen at $1,220.50, down 0.07% on the day.

But, with higher greenback taken out of the equation, gold prices could be trading at a much higher level, commodity economists at Capital Economics noted.

“The dollar has also been the biggest driver of gold prices. Indeed, our consumption weighted gold price suggests that if we stripped out the dollar effect, the price of gold would be much higher,” economists wrote.

“Given that we don’t expect the dollar to fall back until 2019, when slower growth in the U.S. will prompt the Federal Reserve to bring the tightening cycle to an end, gold prices are likely to remain under pressure over the coming months.”

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