Gold market update from Suncorp

Posted July 24, 2015

Suncorp Update_Gold

From our friends at Suncorp …

The gold bull market began in 2001, with the upward trend deteriorating in 2011. Over the last three years, gold has been testing new support levels. Earlier this month gold fell to below $US1100 an ounce, the lowest level in five years. Many analysts believe further falls are to come, with Goldman Sachs predicting that gold will end up below $US1000 per ounce.

Gold is a unique commodity in that its value is not derived based on demand for its use, having few commercial applications, rather investors use it to store value. Earlier this year, we (Suncorp) wrote that gold is falling out of favour with some investors as a store of value, with them preferring to purchase fine art, or a Manhattan apartment instead, which they perceive as holding value equally well. On the other hand, gold is still likely to be used as part of countries’ reserves with the IMF for some time.

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