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Lombardi Publishing Corporation (www.LombardiPublishing.com), a 29-year-old consumer publisher that has served over one million customers in 141 countries, is weighing in on the global economy and which three events will drive gold prices higher in 2015.“Uncertainty and fear are two of the biggest factors that move gold prices. If they increase, investors buy the yellow metal to hedge and protect their wealth,” says financial analyst Moe Zulfiqar. “In 2015, I see these two factors coming into play and taking the precious metal’s prices higher.”
Zulfiqar explains that three events will usher in uncertainty and fear going into 2015: the Federal Reserve’s move towards normalizing monetary policy and raising interest rates; problems in the eurozone and the European Central Bank’s quantitative easing; and China.
He observes that if the Federal Reserve moves ahead with its plan to raise interest rates, it will be difficult for Americans, addicted to ultra-low interest rates, to adjust. The expected economic challenges could result in a sell-off in assets as investors flee towards safety.
“The U.S. Federal Reserve isn’t the only central bank painting a bullish picture for gold; the European Central Bank [ECB] is doing the exact same thing,” Zulfiqar adds. “Previously, the ECB said it would do whatever it takes to save the economically troubled eurozone, and after initiating ineffective monetary policies, it suggested it will now introduce quantitative easing measures—in other words, print money and buy bonds. As the value of the euro declines as a result of quantitative easing, gold prices will move higher.”
Another area where Zulfiqar sees fear and uncertainty forming is China. In 2015, the Chinese economy is expected to show its worst performance in many years, and in 2016, the economic trajectory is expected to slow even further.
“The trade data out of the country continues to disappoint. The housing market in China is worrisome, and the amount of bad debt continues to increase,” he notes. “As problems in the Chinese economy grow bigger, it will send waves of uncertainty throughout the global economy. Once again, this will build bullish sentiment in the gold market.”
“In 2013, the gold market was severely punished, and in 2014, it was flat. This year, I expect to see gold prices start following its long-term trend and move to the upside,” Zulfiqar concludes. “With this, I see the overall mining sector as oversold. There’s a lot of value and I believe investors could make huge returns in this area.”
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.LombardiPublishing.com.
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