Baku. 13 December. REPORT.AZ/ In global commodity markets, gold price fell to $ 1,238.40 in yesterday's auctions which is the minimum of 5 months.
Report informs, the decline in gold is due to the expected outcomes of the two-day Federal Reserve System (Fed) meeting that is ending today.
Thus, it is expected that today Fed will increase discount rates by 0.25 percentage points and will signal a steady acceleration of the US economy. This leads to a decline in the price of gold, which was 8.3% more expensive compared to the beginning of the year. Notably, gold is a tool that does not bring any dividend as a financial asset, but in terms of investment it is a "quiet port" in times of geopolitical risks or a financial crisis.
Notably, this year the world economy is projected to increase by 3.4% and 3.5% in 2018. This puts pressure on the price of gold and encourages investors to invest in risky financial assets.
Analytical Group of Report News Agency predicts that in the case of falling below $ 1 180 / ounce the gold will fall to 1,120, then to $ 1,045/ounce. However, gold is likely to be set at $ 1,180 per ounce and decline will take place in 2018. Next year, gold is expected to decline to $ 1,045/ounce.
Notably, it is expected that the Fed will increase rates by 3-4% in 2018. This means that the discount rate will reach at least 2.25-2.50%, taking into account the outcome of today's meeting.