May 02, 2015 – Gold prices had dipped 2.3% to lowest monthly close in April last month. Silver prices have fared somewhat the same with both the commodity prices declining to their lowest levels in 5 years.
According Mitsubishi Materials Corporation, one of the biggest commodities company, the selloff in gold will continue this year due to possible hike in interest rates in the U.S. The spot silver prices will also drop to as low its record lows this year.
The report says that investors should brace themselves for further decrease in commodity prices without any sign of recovery or consolidation in sight. Gold is forecasted to average around $1,210 in 2015, while silver will drop to $10 per ounce.
During the second quarter of this year, we can expect to see a brief rise in the precious metal prices as the report says that it may trade as high as $1,360 during that quarter. But the probability of strong dollar along with an expected increase in fed rate will put downward pressure on the precious metal prices.
Analysts estimate that the U.S. Fed would announce an increase in interest rate in September or October this year. Postponement in fed rate hike may result cause the shiny metal to hold its position. But once the fed rates are announced it may decrease in value and hover around $1,000 to $1,250.
At the moment there is strong demand of gold in India and China. However, analysts say that the seasonal demand will subside during the middle of the year. Speculative investors are more likely to buy on dips to sell it when the precious metal starts its recovery in the international market.
On a final note, gold and other precious metal prices are expected to remain undervalued in the short to medium term duration. But once the economy shows signs of un stability and weakness it may again rise in value similar to the stellar performance of the previous decade.
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