Gold Prices Set to Soar as Fed Keeps Interest Rates Low

The price of gold is expected to rise to a four-year high above $1,400 an ounce this year due to the Federal Reserve's cautious approach to interest rates. According to Nikos Kavalis, director and founding partner of Metals Focus Ltd., a less-than-inspiring recovery means the Fed won't step up the pace of increases in borrowing costs, leaving real rates in negative territory.

Bart Melek, Toronto-Dominion Bank's director and global head of commodity strategy at TD Securities Inc., said gold may touch $1,300 with a $1,275 average in the fourth quarter. Gold prices have already increased to $1,282.11 an ounce on Monday after jumping 1 percent Friday as the U.S. payrolls report missed expectations.

Melek believes the Fed will be 'very, very gentle' in its monetary policy hikes, which could lead to gold doing well. He and Kavalis are scheduled to discuss the outlook for precious metals at a gathering organized by the Singapore Bullion Market Association on Tuesday.