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Saxo Bank: Gold finish the year higher by between 5 and 10 percent

Ole Hansen: Hedge funds and investors through exchange traded products have increased long exposure recently

Baku. 21 January. REPORT.AZ/ The focus in gold and silver markets have changed from being preoccupied by the negative impact of a rising dollar as well from expectation that US interest rates would rise in 2015. Report was told by the Head of Commodity Strategy of Saxo Bank Ole Hansen commenting the focus in gold and silver markets.

"During the past couple of months the sharp fall in energy prices has triggered a change in sentiment with negative bond yields becoming more of a focus than the deflation worries. Adding to this the sharp rise in market risks following SNB’s surprise action last week we have seen the return of safe haven demand for gold", expert said.

According to O.Hansen, Saxo Bank has a constructive view on gold in 2015: "But must also admit that the current rally has arrived sooner than we thought. Given what we have just seen in Switzerland we could see rising event risk play its part this year and that will ultimately help rekindle the demand for demand whether or not the Federal Reserve eventually decides to raise interest rates. From the starting point of around $1200 at the beginning of January I see gold finish the year higher by between 5 and 10 percent".

The representative of the Bank added that, increased supply does not play much part in determine the price development in gold: " Investment and physical demand are the key factors to look out for considering supply is relatively stable and known to the market while the big uncertainty relates to demand. Both hedge funds and investors through exchange traded products have increased long exposure recently and these developments are the biggest drivers behind the current rise".

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