Gold has built on recent gains, currently trading at $1,282.00, following a resurgence in demand amid thin liquidity conditions.
Gold hits 3-week high
There has been no specific catalyst behind the rise of gold prices to a fresh 3-week high, although as we head into 2018, it is unquestionable that the safe-haven allure of the precious metal will remain intact amid tensions in the Korean peninsula, on the potential for the Fed to under-deliver on rate hike expectations during the 2018 campaign, as well as risks of inflation over-shooting, which should not be ruled out after years of easy money thrown into the US economy.
Outlook for Gold in 2018
Andrew Masters, a currency analyst at FIBO Group, notes: "The first thing that needs to be taken into consideration is the number of rate hikes to be delivered by the US Federal Reserve with most analysts predicting that the Fed will move 3 times as the year unfolds. The second thing which comes to mind is the standoff between North Kora and the US over the Former's nuclear weapons program. Lastly we have the uncertainty surrounding Brexit and although negotiations for the UK to leave the European Union have reached the second stage, there are so many things that could derail the process."
Masters concludes that "as the situation stands now, gold may be a good bet as we enter the New Year until many of the unknowns become clear."
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