Gold prices not likely to change in near future

According to analysts, the markets of precious metals are showing signs of growth due to soft rhetoric from the US Federal Reserve Fund that contributes to the decline of the US dollar rate. Pravda.Ru asked expert opinion from senior analyst at Investkafe, Andrei Shenk, about the state of affairs on the gold market.

"The current price of gold is pretty fair. There is a movement in the dollar rate that affects the price of gold as gold is priced in dollars. As for traditional factors that affect the price of gold, one should mention expectations of inflation, although they do not bring any surprises here. No one sees gold as a defensive asset at the moment. In other words, there are no factors that could move the gold price either up or down. For the time being, there is a balance of demand and supply on the gold market," said Andrei Shenk.

Also read: Gold will break below $960 - it's in the script

Pravda.Ru asked the expert whether the Russian market of gold differed from gold markets of other countries. 

"Gold in Russia, too, is trading at market prices. Of course, we have some specifics, but pricing is still based on stock exchange prices," said Andrei Shenk.

"Prospects for gold prices are stable - $1100-1200 per ounce. When prices go lower than that, it may mean that the gold deposits, the profitability of which is decreasing, may close. If they stop working, supplies will decrease and prices will equalize. For the time being, there are no factors that may push gold prices any higher," said the expert. 

Also read: Gold makes the world go round

We also asked the expert about the situation with silver and platinum and whether gold prices depended on these precious metals. 

"Prices on silver have gone far from gold prices, but there is more volatility there - there are fluctuations. Platinum is a different market with very narrow supplies and different demand. South Africa and Russia are two largest players in the market of platinum. Platinum is mostly used in conjunction with palladium in mechanical engineering. This metal is used in industrial production, although there is connection with gold, of course. Speculative traditional demand for platinum is lower in comparison with gold. I think that the current price is fairly balanced. I do not think that prices on platinum will change soon," concluded Andrei Shenk.


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Author`s name Dmitry Sudakov