Fear Of Grexit Will Push Gold To $1,400 This Year

 

 

The gold market has not seen a lot of inflow from investors looking for a safe haven recently, despite the unrest surrounding Greece. That might all change soon, however, as the odds that Greece will leave the eurozone will push the price of gold to 1,400 dollars per ounce by the end of the year, according to Capital Economics.

Julian Jessop, head of commodities research at Capital Economics, wrote recently that the markets are seemingly still counting on a last-minute solution or trick that will save Greece. Even if Greece is not be able to repay its debts, it would not mean that it will leave the eurozone by default.

Grexit Would Support Gold

Despite that, Jessop is convinced that further escalation around Greece’s debt problems will support the gold price. It is a mistake, according to the head of commodities research, to believe that Greece is a ‘special case’ and that other members of the eurozone won’t follow Greece’s example.

At this moment in time the willingness to take risks is too high among investors, which is evidenced by the sheer force of stock markets worldwide in Jessop’s opinion. The real test for gold will come if gold proves to be the refuge of choice for investors in tough times, when investors can no longer accept the risks they do now. If that test takes place soon, gold will move to 1,400 dollars per ounce this year.