The Annual Gold Year Book released by the New York-based consultancy firm CPM Group has predicted further weakness in gold during 2015. The precious metal is likely to lose its safe-haven status on easing concerns about faltering global economies. Consequently, gold is likely to face multiple challenges with prices seen declining for the third year in a row.
According to Jeffrey Christian, Managing Director, CPM Group, Comex bullion futures are most likely to average at $1,208 per ounce during 2015, down by nearly 4.6% when compared with the previous year. The challenges that existed in golf during the previous year are expected to carry over in 2015 also, CPM Group noted.
Several factors had led to declining gold prices in 2014. Relatively weaker fabrication demand from China and stronger US dollar and equity markets are cited as some of the reasons for the terrific fall in gold prices last year.
Adding fuel to fire, oil prices also had started slipping toward the end of the year. In addition to all these factors, gold prices may face further resistance in the face of probable U.S. interest rate hike announcement. Such speculations could drive gold prices to significantly lower levels.
However, CPM Group expects that downside is limited for gold in 2015, as the negative impact of all of the above factors seems to be already priced in. The fabrication demand is likely to increase during the year to 96.9 million ounces, higher by 4.2% when compared with 2014.
However, the rise in fabrication demand may not be enough to push the gold prices significantly. Any weakness in enthusiasm for US dollar could bode well for gold, noted CPM Group.