Reasons behind the Hike of Gold Prices in 2015 according to World Gold Trust Services

Reasons behind the Hike of Gold Prices in 2015 according to World Gold Trust Services

William Rhind, CEO of World Gold Trust Services told CNBC on 27th Jan “while gold is often seen as a hedge against inflation, gold could still rise despite fears of deflation around the world”. That is why governments frequently react to deflationary forces to the world economy through weakening their currency for competitive reasons, William said in an interview from the inside ETFs conference in Florida. He also said “Currency weakness or debasement has typically been a good thing for gold”.

World Gold Trust Services is the leading sponsor of the largest exchange traded fund. The ETF saw unit’s excellent hike 3.4% weekly by 26th Jan, enhancing its weekly inflows by 8.2 million units. If the oil prices fall, it will prompt crude producers to liquidate gold reserves; William said that it has not been the case in Russia as Russia is the leading client of gold from a central bank perspective.

William Rhind said is Russia coming into the market and purchasing even more gold as the result of the oil prices falling. He also said that other countries will respond in the same way, but the positive reaction from Russia underscores the point that gold priced in non-dollar currencies performed well last year.

According to the results from gold investment in 2010, gold prices increased by 27%, after 12 years of constant growth gold prices dropped by 28% in 2013 and the downturn continued by 1.5% in 2014. If the forecast comes true, then the price of gold would jump from 27,000 to 35,000 per grams in 2015.