Gold Expected to Decline Further Thanks to Fed Action

Gold will extend losses this year as U.S. interest rates increase, providing an opportunity for investors to buy the metal to benefit from a rebound spurred by Asian demand, according to Barclays Plc.

“We expect gold prices to test new lows in 2015,” analysts Suki Cooper and Kevin Norrish wrote in a report dated yesterday, predicting that prices will drop to less than $1,130 an ounce. “The lows of this year and next are likely to offer attractive entry-level prices for the longer-term investor.”

Bullion last year posted the first back-to-back annual drop since 2000 as U.S. equities surged to records amid an improving economy, the dollar rose and assets in bullion-backed exchange-traded products extended losses. While the physical market looks more supportive this year, that won’t be enough to overturn the economic headwinds pressuring prices, the analysts wrote.

Bloomberg

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