© Daniel Briesemann
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First of all, to my mind, the Swiss gold referendum appeared likely as a short-term momentum, where price for bullion has suffered a decline right after the vote results were out. Nowadays, the prices have already recovered, and we are looking forward to see how the market performs amid other major influencing factors. As an example, the US Dollar performance significantly weights on the investors' strive for the precious metal. In addition to that, the physical gold demand in Asia is also noteworthy.
China is continuing to ease the access to key industries in order to spur the flow of investors in other sectors. Moreover, it is essential to note China's first unexpected interest rate cut in two years. What impact do you see on precious metal, since China is the world's largest gold producer?
I do not see any major impact on gold from China and its upgraded market targets. However, there is an aspect that affects the gold's performance mainly due to the demand or volume. If China will be focused on importing gold into the country, this should bring an efficient effect and support the price.
The US labor market has cooled its pace of improvement as the number of Americans who claimed for unemployment benefits was greater then expected. Moreover, business investments were rather weak in October. Such a background could possibly bring back the concerns of whether the Fed will hike interest rates soon. Do you think it could revive investors hunger for gold or it is more likely to be short- term?
The prospect of the Fed's interest rate hike in the US is seen for us as coming soon. Respectfully, we suggest this to happen at the end of next year's second quarter. Such an update in the US economy should definetely weight on the gold price. However, this will likely only happen during the first half of the year. The reason being is that once the Fed had started to inform about its interest rate hike cycle, the price for bullion slowly but surely started to become priced in and, by the end of the secong quarter year 2015, we foresee a rising demand for the metal.