Gold is considered a safer asset during the times of crisis by many investors. And this makes the precious metal the choicest investment option (in the form of gold bullion coins and bars) for them. Of late, the gold prices saw some fluctuation. The recent developments over Brexit have impacted the gold price and if the Brexit happens, it will have a big impact on the gold price. Let’s check out a few gold market predictions by experts as we enter the New Year.
Gold Prices May Soar
If Theresa's Brexit plan works fine, it will mean the complete break from the European Union. The Pound will weaken with the slowdown in the British economy. This would result in the investors’ interest in gold. The demand will result in the rise of the gold prices to between £970 and £1,000 an ounce. This Hard Brexit would result in no free movement for migrant workers. Also, there would be no access to the single market. This would worry investors regarding the lack of market access, and it is likely that this will deter capital from backing UK stocks. And result in boosting the price of gold as investors seek a new direction for their funds. Even after separating from the single market, the UK is likely to have a few European trade deals. Hard Brexit might not bring boost as much as no deal would result.
Gold Price Will Go Up
If no deal happens between the UK and EU, gold price will go up as the investors' demand will rise. Also, Pound Sterling will go weak and the price of gold will increase somewhere over £1,200 per ounce. If the UK and EU will not be able to agree a deal, then the UK will be left isolated and wouldn't be able to trade properly; this should worry traders. Regulations, work visas, tariffs etc could lead to low production and less profit. No deal, meaning disagreement, can result in the spikes in the gold price. Following the Salzburg Summit 'ambush', the Pound went down and gold went up. Gold price soar from £901 to £915 per ounce, and later to £930 per ounce.
Gold Price May Drop
There is a third situation related to Brexit. What if Brexit will be averted or aborted?!? In such a case, the price of gold will depend on how much the US dollar is strong. Due to investors' fear subside; the price of gold may drop. The estimated range is between £900 and £930 per ounce. In the situation of second referendum or another general election, this can happen.
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