Gold Prices Likely To Start 2015 Weak, But Rise Into Year End

he Fed official exited its asset-purchase program in October and is on the path of monetary-policy normalization after using extraordinary measures to support the U.S. economy in the aftermath of the 2007-08 credit crisis. Based on slowly improving economic data, such as an unemployment rate of under 6% and third-quarter gross domestic product of 3.9%, economists expect the Fed will be in a position to start to raise rates by the second half of 2015.

“Looming Federal Reserve interest rate increases in the second half of 2015 and the stronger U.S. dollar will keep pressure on gold prices through the year. The gold market could see rallies if demand improves for physical gold, but weaker growth in much of the world will temper such prospects,” said Rob Haworth, senior investment strategist, U.S. Bank Wealth Management.

Erica Rannestad, senior analyst, precious metals demand, Thomson Reuters GFMS, agreed that gold prices will likely be lower in the first half of the year because of the Fed’s expected action, which she called “the top driver” for gold-price direction.

She said gold prices will likely consolidate next year, and lists and a 2015 average price $1,175, with prices trending higher in the second half of the year.