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(Bloomberg) — Not even the prospect of the Federal Reserve raising interest rates is enough to crush gold executives’ enthusiasm.
Prices will reach $1,385.63 an ounce by the end of the year, according to the average estimate in a survey of 16 participants at the Denver Gold Forum, the 27th annual gathering of mining executives, hedge funds, bankers and analysts that attracted more than 1,100 attendees. The forecast is 4.1 percent above Wednesday’s closing futures price.
Investors piled into gold in the first half of the year as yields fell below zero on more than $8 trillion of government debt in developed markets. Most survey participants said the Federal Reserve’s interest-rate policy will continue to be the driving factor for the metal, which benefits as a store of value when borrowing costs are low. The other big questions on the minds of gold watchers are the U.S. election and the stability of the global economy.
“I’ve never seen a circumstance when so many different types of people and entities are buying gold,” mining executive Randall Oliphant, the chairman of the World Gold Council, said in an interview in Colorado Springs. “Everyone is trying to figure out, what do negative interest rates mean?”
Gold had the best first half in almost four decades, rallying 25 percent, as the Fed held off on further rate increases and other central banks boosted stimulus to support growth. While gains this quarter slowed to just up 0.8 percent, the metal remains attractive.
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