Gold price to EXPLODE: Reserves dwindle and US-China trade war talk spark panic

The World Gold Council has claimed that world supply may have peaked in 2017 that when combined with understated inflation and strong demand from China and India, should push prices to $1,500 an ounce by the end of the year from about $1,327 now, according to Frank Holmes, chief executive officer of US Global Investors Inc.

Support for the rise in the price of bullion comes from Goldman Sachs who – for the first time in five years – predicted that the commodity would “outperform” over the coming months.

Goldman Sachs analysts, said in a research note: “Our commodities team believes that the dislocation between gold prices and US rates is here to stay.”

While Stephen Letwin, chief executive officer at Iamgold Corp told a mining conference in Hong Kong on Thursday that reserves were dwindling.

He said: “Gold has a much higher probability of moving north as opposed to south.

“I’ve been around a long time; when you’re in an industry that’s not replacing what it produces, eventually, the price has to move up.”

The threat of a global trade war sparked by the US and China could also send the price of gold rising as investors look to bury funds in havens safe from global, political volatility.

Mr Trump claimed last month that “trade wars are good, and easy to win”.

The president added: “When you’re already $500 Billion DOWN, you can’t lose!”

China’s commerce ministry announced Wednesday reciprocal 25 percent tariffs on $50 billion worth of US goods, including cars and chemicals.

The announcement came after the Donald Trump administration announced 25 percent tariffs on $50 billion of annual imports from China in an attempt to force changes in Beijing’s intellectual property practices.

Following the news, gold futures for June delivery on the New York Mercantile Exchange were last up by $7.20, or around 0.5 percent, to $1,344.50 a troy ounce.