Is unloved gold a buy? Price tumbles below $1,200 as strong dollar deters its usual fans, despite market upsets like Turkey

August 25, 2018

London (Aug 25)  Investors are shunning gold, sending it to two-year lows below $1,200 an ounce despite a rocky period for world markets (ealy last week).

Financial pundits say the strong dollar is making it expensive, even for those who would normally favour it as a safe haven asset during upsets like the Turkey crisis.

Gold is off its recent low of $1,165 an ounce hit in mid-August. But it has only crept back up to around $1,200, in response to a slightly weaker dollar, over the past week.

So is gold currently unloved enough to represent a buying opportunity?

Some investing commentators believe it's a good time to buy against market sentiment, which has seen heavy 'shorting', or bets against, the gold price of late.

A commodities expert suggests that it will stick at around $1,200 until the end of the year, before a bout of dollar weakness pushes it up to $1,350 by the end of 2019.

However, one asset manager - who dubs gold 'a hedge against human stupidity' - has dropped it from all but its most cautious portfolios.

This is Money rounds up the latest views on where the gold price might go next, and how future US interest rate and dollar moves could affect it. We also explain how to buy gold below.


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