This price prediction explains three reasons why gold could rally to $1,600 by the end of the year due to the current short squeeze, China & India's consumption & Fed monetary policies.
much more room to run" said Anthem Blanchard, CEO of Anthem Vault,
which sells physical gold and silver to U.S. consumers. Blanchard cited
three reasons for why he thinks gold could climb to $1,600 an ounce by
year end, all of which have to do with the fundamentals.
gold short squeeze appears to be in play, Blanchard said. In other
words, many investors sold gold short in hopes that its price would
plunge, but the price of gold has been climbing for several sessions
now. So the shorts must cover their trade, meaning they must buy back
the gold position they shorted and take a loss, since they now have to
buy gold at a higher price.
2. An increase in gold demand from
China and India has been another catalyst for gold, Blanchard said.
China's consumption of gold in the first half surged by more than 50%,
reinforcing expectations that the nation will overtake India as the
world's top gold consumer this year, the China Gold Association said in a
statement on its website on Monday.
3. The biggest driver for
gold prices, though, is the expectation that the Federal Reserve will
keep interest rates at near zero, Blanchard said. Also whether or not
the Fed will taper its $85 billion per month in quantitative easing.