Gold prices have yet to regain its 2011 momentum when it was close to its highest price of nearly $2,000 an ounce.
Today, the yellow metal is $1,277.20–an overall one-year increase of 11.37 percent, despite a significant drop-off in the last month.
As 2016 nears the end, a Reuters poll shows that the yellow metal is on pace for its third yearly decline.
When it comes to gold price predictions, that doesn’t mean 2017 is on pace for a bearish year: in fact, the 35 analysts polled by Reuters project the yellow metal to reach its highest average annual price in roughly four years.
According to the Reuters poll, analysts are predicting the gold price to average $1,331 per ounce–it’s highest since 2013. Since then, the average has dropped 28 percent year-on-year.
Reuters said gold has been able to pick back up in 2016 as expectations dimmed on the Federal Reserves bumping interest rates back to the same levels before the market crash.
Others are also making strong general gold price predictions: the Templeton Emerging Markets Group has suggested that gold is on pace for a 15 percent increase by the end of next year. Such an increase would put the yellow metal at $1,400 per ounce.
In an interview with Bloomberg, Templeton Emerging Market’s executive chairman Mark Mobius said that a lot, of course, will depend on the real rates. “The Fed is going to increase the rates by a little bit but not excessively and there is no guarantee that a rise in interest rates will put people off,” he added. No doubt, investors will be watching the gold market closely as the year comes to an end.
Why Should I Invest in Bitcoin?
Bitcoin has had a strong 2016, making it a good time to invest for those who see potential in the usually volatile market.
As a currency, bitcoin has proven advantages. Its digital nature makes it hyper-portable, divisible, durable, and unconsumable. Its decentralization means that it isn’t beholden to the vulnerabilities of national currencies and is perfectly transferable across nations.
Bitcoin isn’t held in traditional banks, an incredible asset to the 50 percent of the world population which is unbanked (does not use or have access to commercial banking services), and the quarter of Americans who are unbanked or underbanked. With low transaction fees and a balance between anonymity and transparency, bitcoin seems to be a near-perfect online currency.
Bitcoin has come a long way since being faced with resistance from both governments and potential consumers. The US Internal Revenue Service took action to discourage the use of bitcoins, by ruling that “general tax principles applicable to property transactions apply to transactions using virtual currency.” In practice, this means that the fluctuating value of bitcoins could trigger capital gains tax for consumers.
The EBA had encouraged lenders to avoid bitcoins but now the Bank of England is adopting the underlying blockchain technology with a view to supporting the cryptocurrency. Bloomberg recently reported on the possibility of the first bitcoin ETF gaining ground.
Bitcoin hit an all-time peak on November 29, 2013, when it was valued at $1,137. Since then, it has experienced a number of highs and lows. The bitcoin price index chart registered a healthy $731.26 on CoinDesk as of November 2, 2016.
Dramatically affected by sordid scandals and government regulations, bitcoin is an incredibly volatile currency. Values dropped following the revelation that the Bitcoin Foundation’s chair was charged in the the Silk Road drug case and the abrupt disappearance of MtGox, the world’s largest bitcoin exchange. The Tokyo-based exchange collapsed on February 28, 2014, with $63.6 million in liabilities and 850,000 missing bitcoins (at the time, valued at almost $500 million). Bloomberg briefs reports that the price of bitcoin decreased by 20 percent the day that MtGox went offline. However, the very next day bitcoin closed at $609, representing 35 percent growth.
There have also been small peaks related to PayPal’s decision to accept bitcoins (November 2014), the New York Stock Exchange’s announcement that it will invest in Coinbase, a bitcoin trading platform (December 2014), and Samsung’s news that it plans to use bitcoin technology in apps (April 2015).
Despite these small peaks, Bitcoin remained relatively stable in 2015 – particularly compared to the dramatic rises and falls of late-2013 and early-2014. It started 2016 valued at $434.46, with just a marginal dip after. Since then, the currency has seen an upward curve in value.
For investors who genuinely believe in the potential of bitcoin to become a major international currency, this may constitute an excellent time to invest in the currency. Historically low values coupled with some evidence of growth may spell promising outcomes. The only certainty in bitcoin investing is that it is a very speculative game, with the potential for major winners and losers.
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