Gold may rise to 1250 dollars per ounce - FORECAST

Report: Sharp reduction in price of gold expected in long term

Baku. 10 September. REPORT.AZ/ If the Federal Reserve (Fed) will not raise interest rates at a scheduled September 17 meeting, the price of gold on the world market can reach 1250 dollars per ounce.In July, the price of gold, which sold for 1120 dollars, fell to 1078 USD. However, later fluctuations of the global economy boosted demand for gold, which is one of the reliable investment tools.

Analytical Group of Report notes that probability of raising the increase in interest rates of Fed due to the reduction of the unemployment index in the US to 5.1% for the first time since April 2008 has reduced investors interest in gold, which doesn't bring interest income.

Rise in gold prices depends on the Fed's decision. Economists believe that Fed will not go on raising the key rate because of the negative situation in world financial markets. According to a nationwide Bloomberg survey, only 30% of economists predict the Fed's key rate increase. Despite this, the China's Central Bank governor Zhou Xiaochuan said mass sale of shares on the stock exchanges gradually fading.US bond market is also ready to increase interest rates.Thus, financial market expectations regarding the gradual increase in the Fed's key rate is reflected in the value of bonds and futures market is also under the influence of interest rates. However, in any case, the panic is not expected in financial markets.

Analytical Group of Report News Agency believes that, positive trend observed in recent days on international financial markets creates favorable conditions for increasing the Fed's key rate.If the increase is not going to happen this time, tensions will remain in global markets.However, if the key rate will rise in a few days after the tough short-term measures the financial market will return to normal rate.Gold prices may not fall to 1045 dollars per ounce.In the long term gold prices expected to fall to the level of 800 dollars per ounce.

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