Gold Price Forecast 2015: The gold price looks like it will end 2014 down, rounding out three years of weakness for the metal. That makes the outlook for gold in 2015 even more anticipated than previous years...
The biggest questions around gold's direction in 2015 include: Is gold finally done consolidating? When will it regain its bullish trend? Is gold a good buy today?
Let's take a look at all the factors to consider...
How the U.S. Dollar Will Affect Gold Prices in 2015
One of the biggest headwinds for gold prices this year has been the U.S. dollar. So far this year, the U.S. Dollar Index is up from 80 at the beginning of July to about 88.5 right now. That's a 10.6% move in just five months - huge for any currency.
Now the U.S. dollar is at a level not reached since July 2009, in the immediate aftermath of the financial crisis.
A stronger dollar means fewer of them are needed to buy the same quantity of gold. The gold price can still rise simultaneously with the dollar, but it's more difficult.
We could see the U.S. dollar continue to strengthen into 2015. The most influential central banks across the globe are aggressively printing money and either keeping interest rates low or actively lowering them. Japan, Europe, and China are all battling to weaken their currencies.
Overall, though, I don't expect the dollar to continue to weigh too much on gold's advance, because central banks will be desperate to get inflation going. And at some point the dollar's rise will be problematic, so expect the U.S. Federal Reserve and U.S. Treasury to start "talking down" the dollar before too long, which should help the gold price.
Asia's Surging Demand Will Move Gold Prices in 2015
Another big support for gold is demand, especially from Asia.
Chinese gold demand has been strong and growing rapidly, especially since 2008. According to the China Gold Yearbook, it has nearly doubled from 1,141 tonnes in 2012 to 2,199 tonnes in 2013. What's more, it's expected to grow nearly 50% to more than 3,100 tonnes in 2014.
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