Will Gold Prices Continue to Rise Above $1,300 Per Ounce?

For the first time in over 15 months, the gold price briefly rose above $1,300 per ounce on Tuesday (4:00 p.m. EST) but dipped under, to $1,278.65 on Wednesday (12:52 p.m. EST).

Despite the fall, over a 30-day period, the yellow-metal has steadily inclined – rising from $1,222.30 per ounce on April 6 to $1,300.30 on May 3 – to $1,277.30 on May 4.

The decline in the gold price fell on the strength of the US dollar and weaker oil prices, according to kitco.  

Despite Wednesday’s fall, Reuters reports the overall incline of the gold price is in part due to the United States’ payroll report falling short of forecasts, dampening interest rates and weighing on the US dollar.

In the past week alone, the gold price has benefited greatly due to a weaker dollar. This is in part because the Federal Reserve has kept short-term interest rates and has no plans to raise them in the weeks ahead, according to the Wall Street Journal.

US jobs data impacts gold price

Nasdaq reports investors are hopeful the monthly jobs data, which will be released on Friday (May 6), will provide insight to the state of the US economy and a potential increase, and says higher rates tends to weigh on the gold price.

Last month, Reuters polled a panel of 30 gold analysts at banks and trading houses, which returned an average gold price forecast for 2016 at $1,209 an ounce. This is up from $1,118 done in a similar poll in January of this year.

The survey showed gold prices are expected to steadily rise over the year with a peak average of $1,250 an ounce in the fourth quarter, but won’t hit $1,300 again until January 2017.

Matthew Turner, senior precious metals analyst with Macquarie, told Reuters the key supportive factors are the shift in the Federal Reserve’s stance, a weaker dollar and the prospect of inflation.

“The first two have raised the base price, the third is why we expect higher medium-term prices,” he said.