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The World Gold Council released a review of 2015 and outlook for next year, noting that it is optimistic about the metal’s prospects in 2016.
The World Gold Council released a review of 2015 and outlook for next year, noting that it is optimistic about the metal’s prospects in 2016.
Its 2016 predictions are as follows:
- Gold continues to play a very effective role as a hedge, as stock valuations in the US and elsewhere remain elevated, as investors have increased their risk exposure in search of returns amid a very low yield environment.
- While there are some concerns about GDP growth across emerging markets, economic output continues to increase and so do incomes – this, in turn, strengthens the case for gold as a long-term strategic asset and wealth preservation tool.
- We are likely to see further developments in the key Asian markets with the continuing introduction of the pro-gold schemes and potentially a gold exchange in India.
- Following the launch of the International Board by the Shanghai Gold Exchange (SGE) to open up the Chinese gold market to international investors, SGE’s plans to introduce a yuan-denominated gold pricing mechanism to facilitate regional market trading are also likely to take shape in 2016.
Alistair Hewitt, head of market intelligence at the World Gold Council, commented:
2015 has been a fascinating year for the gold market, with strong demand from central banks, Asian markets and the European bar and coin market. The pro-gold schemes introduced by the Indian government and the further internationalisation of the renminbi alongside the increasing transparency of Chinese gold reserves will continue to improve the market next year. Gold’s role as a portfolio diversifier, a wealth preservation tool and a tail risk hedge will continue to prevail due to expensive stock valuations and high liquidity risks. Finally gold’s cultural significance endures as we look ahead to 2016.
