After the drama in 2013 investors were hoping that gold would make a comeback in 2014. Now that the year is over we can easily state that this did not happen and look at the chart below, it is clear that the gold price has spent some time under water.
For a considerable period of the year, gold spent time under the 1200 dollar per ounce level. Nevertheless 2014 was not a disaster year for the precious metal. Up to September things were not too bad and we even saw a small spike in March to 1350 dollars on the back of the Crimea crisis and worries with regards to the Chinese economy.
Some analysts are rather satisfied with gold as a consequence. Derek Macpherson of M Partners was looking for the gold price to stabilize this year and that is exactly what we got. Gold traded within a relatively tight range this year.
Gold In 2015
Will the gold price make its comeback in 2015 then? Opinions are divided. Martin Murenbeeld, Chief Economist at Dundee Capital Markets, expects gold to rise to 1277 dollars in the fourth quarter and for the first quarter of 2016 he foresees a gold price of 1311 dollars. Not a dramatic increase, of course, but it is an increase. Commerzbank assumes the gold price will end on 1200 dollars in 2015, while Citi has set its price target at 1220.
The consensus appears to be that the gold price will underperform in the first half of 2015 because investors are anticipating the Federal Reserve to raise interest rates. The pressure could decrease then as the year progresses. Nevertheless we cannot assume 2015 is going to be a calm year for gold according to Murenbeeld.
He is worried, among other things, about the development of the European economy. He feels that the economy is not growing and that it will not start doing so in 2015. Investors need to take into account that the capital markets are getting tighter as well. In the longer term this could create a tough pipeline for companies.
