At the beginning of 2014, very few expected crude oil to fall to $54, very few expected silver to fall like anything. No one expected Indian stock markets to rise to new historical highs. The Crimean issue resulting in the global isolation of Russia was also never expected. The “Islamic State” was not there at the beginning of 2014. Every year brings in new uncertainties. We can just try to assess before what might come so that we can prepare ourselves.
The US economy and US Interest rates. A continued rise in US economic growth will result in greater chances of an interest rate rise quickly. The multiplier effect will be in the form of a very strong US dollar, weakness in emerging market currencies, gold and silver could fall first and then rise.
Global interest rate scenario: Monetary expansion (if any) by the European central bank and the Bank of Japan will affect currency markets and commodity markets alike. The Federal Reserve and the Bank of England are expected to restart increasing interest rate hikes in 2015 and continue for a few years more.
Demand from Asia as well as Europe. Traders and investors are focused on demand for bullion from Asia. Asian demand for gold and silver will continue to rise. However a big thrust for bullion will come if European physical demand for bullion rises. I expect gold and silver demand from Europe to zoom in 2015.
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