Garrett Knight Associates has reiterated its call on precious metals, particularly on gold as price inch higher spurred by diminished odds of an interest rate hike from the Federal Reserve in 2015. Gold traded as high as $1190 recently as speculation increased that evidence of a marked slowdown in the US and Chinese economies would see policymakers continue to keep monetary policy accommodative.

According to Nick Freeman, commodities strategist at Garrett Knight Associates, gold could be set for a sustained push higher before the end of the year. “The likelihood of a US rate hike grows weaker with each and every release of new economic data. The US economy is definitely slowing, of that there is no doubt – so we don’t see the Fed raising interest rates against a backdrop of slowing growth. They may choose to use below target inflation as their justification but it amounts to the same thing; gold going higher”.

The strength of the US dollar could put more pressure on the Fed to hold fire on interest rates after corporate earnings reports from large US corporations lamenting on the effect of the greenback’s exchange rate with other currencies on their revenues and profits in the third quarter.

“Garrett Knight Associates certainly isn’t saying that short-term reversals in gold prices aren’t possible but we feel confident enough to say that the bottom in gold prices occurred in early August. We think we could be looking at prices well north of 1200 by year’s end if not higher,” concluded Freeman.

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