By Gavin Gibbon
Increasing uncertainty could push gold prices up to levels not seen for nine years
Just days after predictions that the price of gold could hit $1,600 an ounce, experts have said the commodity could increase to as much as $1,900.
The continued trade war between the US and China and the current geopolitical tensions involving America and Iran have served to increase investment in gold, pushing it closer to $1,600, although the price dipped slightly on Thursday morning to $1,546.32 an ounce.
Han Tan, market analyst at FXTM, told Arabian Business: “Considering the heightened geopolitical tensions in the Middle East, another unexpected flare-up could send gold prices back above $1,600 over the near-term. Taking a longer-term perspective, investors would note that bullion has maintained an upward bias over the last four years.
“As investors brace for the next global recession, which appears to be long overdue, they could be inclined towards increasing their exposure to such safe haven assets. If the depth and breadth of the next global recession is significant enough, that could send gold on another run past $1,900, levels not seen since September 2011.”
KP Abdul Salam, group executive director, Malabar Group, said it is a perfect time to invest in gold.
“It is a known fact that people invest or buy gold to protect themselves from volatility and uncertainty. Gold is always seen as a safe haven,” he said. “This is one asset which people buy when the economy was growing or in recession.”
Karim Merchant, CEO and managing director, of Pure Gold Jewellers, also said that if the US-Iran tensions are not resolved, the long-term price of gold may hit 2011 levels.
Asked how the rise might affect retail, he added: "If the prices rise, then consumers may take a wait and see approach. They will eventually adjust to the prices. But if the prices drop, we can expect consumers rushing to purchase gold."