Gold Price Forecast 2018

2018 has seen a positive start to the year, with stock values in January outperforming expectations. Both the S&P 500 and FTSE 100 have seen strong starts, and Goldman Sachs has reported that the global economy is beating predictions for the first time in eight years, reaching a growth rate of 4%.

Business Insider, and experts from UBS, HSBC, Merrill Lynch and JPMorgan have all agreed the outlook is good, and that stocks should continue to rise. Historically, most years with global stock price rises in the first month continue to see price rises throughout the rest of the year.

Stock increases traditionally see gold’s price drop, but last year saw stock prices rise and gold stay steady as demand increased and the need for protection against exposure continued. The risk for gold this year could instead be the increases in currency strength.

The Pound has been weak for some time despite the Bank of England raising interest rates. Continued uncertainty over Brexit, and slow growth for the UK economy are keeping the Pound at uninspiring levels, something that helps gold’s position.

The Dollar however has been fluctuating until recently; and is now rising steadily, something which could see gold’s price fall. Fears that the Federal Reserve will increase interest rates could see the Dollar strengthen further, driving the price of gold down should it happen. The Dollar has been weakened somewhat by the economic policies of President Trump, with both Russia and China stockpiling gold ahead of moving away from the US Dollar as a reserve currency. Dialogue from the President has also raised fears that the US could enter a trade war with China, imposing tariffs to combat China’s subsidisation of the steel industry.

President Trump is at risk in both the House of Representatives and with trade disputes in 2018

A trade war between the two could see economic impacts across the world, but would almost certainly lower the value of the US Dollar.

In gold’s corner however is continued growing demand; India and China have both shown increased interest in precious metals. With unemployment rates dropping, and economies growing, more people are turning to invest their wealth in gold.

If you're asking yourself "should I buy Gold in 2018?" then consider the following - although the stock markets are doing well; international disputes, Brexit uncertainty, and weak currencies could make 2018 a good year for gold.

Click to view our past, and most recent gold price predictions.

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