Analysts predict gold price rise to $1,350 per troy ounce

Gold prices could rise further to $1,350 per troy ounce as a result of  geopolitical tensions in Syria and North Korea, according to commodity analyst Phillip Streible of RJO Futures. In an interview with Bloomberg he says that the expectation of more interest rate hikes by the Federal Reserve is putting downward pressure on gold prices, but that this effect is currently overshadowed by geopolitical developments.

Analyst Daniela Corsini of Intesa Sanpaolo also foresees a further increase in the Gold price Up to $1,350 per troy ounce, a move she says is driven by geopolitical developments on the one hand and concerns about rising inflation on the other. Good data on the US economy can actually have a positive effect on the gold price, because it can be an indication of rising inflation.

Silver price will also benefit from this uptrend, according to the Intesa Sanpaolo analyst. She foresees a price of $19 per troy ounce by the end of this year, while the price stands at almost $18 at the time of writing. She is less enthusiastic about platinum and palladium, due to an expected decline in car sales in the United States and China. The automotive industry uses a relatively large amount of these two precious metals and is therefore very decisive for the price.

Bloomberg: Financial markets seem to be barely reacting to the threats from North Korea. Only gold seems to react, what's up with that?

Gold has had a significant boost over the past month. That all started in Syria with geopolitical tensions and then shifted to North Korea and that failed missile launch. I expect that there will still be plenty of interest in gold and that we will still break through the $1,300 per troy ounce level. That will surprise many investors, given the number of contracts with a stop-loss at that level and the fact that many investors are still focused on the Federal Reserve and its ability to raise interest rates and shrink its balance sheet as this year progresses. So gold still has some headwinds, but from a geopolitical point of view, the price will continue to rise. I think $1,350 is very likely.

And the French elections? What market reaction do you expect from that, does gold also react to these developments?

Absolutely, we already saw a reaction when the United Kingdom decided to leave the EU. If the French elections go in that direction as well, other countries could follow and the whole of the European Union could fall apart. If that happens, you can expect a flight to gold. These are the types of developments that people should keep an eye on when buying gold. Several things are happening at the same time now.

Suppose the elections in France turn out differently and Le Pen does not win. Will gold also show a downward correction?

I think there are several forces that pull on gold. If Le Pen doesn't win, the price of gold could fall somewhat. If North Korea moderates its tone to get relief from the sanctions, then you can also see gold coming back a bit.