Gold Price Set To Push Higher As Inflation Picks Up – RBC

The gold price is set to move higher in the coming months as inflation picks up according to new research from RBC.

“Analysis suggests a -0.5% real rate would imply a $1,380/oz gold price and a -1.0% real rate $1,546/oz” – that’s according to RBC’s April 10 Global Gold Outlook note, which takes a look at how lower real interest rates, coupled with a dovish Fed will impact the gold price.

RBS via Value Walk

Consumer prices in the United States rose 0.9% year-on-year in March of 2016, indicating that inflation is reemerging after a long period of dormancy. This should have sparked a more hawkish tone from Federal Reserve policymakers. However, the recent significant global volatility in January and February has left the path for rate hikes in 2016 much more uncertain and led to a sudden dovish turn by the FOMC.

And with inflation picking up, but the Fed unable to hike because of global macro issues, RBC speculates that there are now growing parallels to the 1970s when external pressures and fragile growth rates did not allow the Fed to hike. This was also notably a time of strong gold price appreciation.

See full analysis from RBC on Value Walk here

Gold Prices (LBMA)

21 April: USD 1,257.65, EUR 1,113.21 and GBP 877.01 per ounce

20 April: USD 1,247.75, EUR 1,098.09 and GBP 867.45 per ounce

19 April: USD 1,241.70, EUR 1,095.18 and GBP 867.01 per ounce

18 April: USD 1,237.70, EUR 1,095.02 and GBP 872.45 per ounce

15 April: USD 1,229.75, EUR 1,092.16 and GBP 867.46 per ounce

Silver Prices (LBMA)

21 April: USD 17.32, EUR 15.31 and GBP 12.05 per ounce

20 April: USD 16.97, EUR 14.93 and GBP 11.81 per ounce

19 April: USD 16.62, EUR 14.67 and GBP 11.57 per ounce

18 April: USD 16.20, EUR 14.33 and GBP 11.41 per ounce