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Gold prices UK has been below $1,300 an ounce at the start of the year but now it is over $1,500. This is a six-year high rate and many investors have opted for the yellow metal amidst rising tensions in the political conditions and unpredictability in the global economies. In a few days, the price of gold UK increased over $100 an ounce and experts are trying to scrutinize the factors responsible for the growth and the factors that can help them identify the peaks.
There are many things in support of the price of gold UK. The yellow metal serves as a safe-haven for people who fear the trade battle between the US and China. The two countries are now getting back on track where they may settle the difference this year and investors have been waiting for the announcement of such settlement but the US announced that it will impose further $300 billion tariffs on Chinese goods with 10%, as the negotiation is expected to take place.
China, on the other hand, halted the purchase of the US farm produce and the two sides are trying to battle out, while, the other countries are unable to contemplate the next moves. The global economic condition has been stagnated and central banks are starting to feel the heat of recession.
Governments are cutting interest rates and the markets are entering a global battle with new lows in currency devaluation.
It seems the weakness of the global financial markets is accessible to all and they are exploiting it without any restrictions.
Further, there are tensions in the market over the impact Brexit will have on European economies. The pending UK exit is another danger, which is making it difficult for the politicians to get a clear perceptible plan. There are threats of the UK leaving the EU without a deal on October 31. This condition can lead to another phase of volatility, which can support gold price UK.
Further, negative bond yields and lowering interest rates are also making the yellow metal attractive. Even Germany and Japan’s government debts have negative yields and the yellow metal provides an opportunity to invest in zero yield option.
According to Deutsche Bank, about $15 trillion of government bonds that is 25 percent of the total market are now trading at a negative yield.
It is expected that the price of gold UK can be over $2000 if the US Sino trade war takes undesirable turns, and the UK exits the EU without a deal. The gain in precious metals provides attractive opportunities to investors.
Others expect the market to go up and then undergo a pullback. Much will be determined by other global factors.
Currently, the metal is trading at $1545.90 and the sustained growth in rates show the presence of buyers at this rate and this can create adequate momentum. If the buying continues to grow many new buyers will try to enter at smaller corrections.
If the movement below $1545 continues for long, it may indicate investors selling gold and it can trigger a downside.
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