Gold Price Forecasts: Bart Melek

The London Bullion Market Association (LBMA) asked 23 Gold analysts from around the world for their predictions on the average, high and low price range for the year ahead for Gold. Analysts who contributed to the Survey were invited to identify the top five drivers likely to influence the gold price in 2017. The top two drivers were the US dollar and US real interest rates, followed by demand in China and India, globaal political events and President Trump’s fiscal and International policies. Gold Stock News presents what the Analysts forecast for Gold in 2017.

Bart Melek

TD Securities, Toronto

Gold: Range: $1,108 – $1,375

Average: $1,256

With the Fed signaling its desire to continue tightening into 2017, the rising cost of carry will likely ensure that the gold price continues to remain quite lacklustre before it gets better. The recent steepening of the yield curve, higher real yields and a supercharged US dollar have kept investors away from gold, which precipitated a sharp decline in the gold price in the final days of 2016 and still presents the risk of another sharp decline in the near term. But the strong likelihood that the Fed will be very measured in its removal of monetary accommodation, along with US political uncertainties, even as the US economy closes the output gap at a more rapid rate and inflation approaches target, should keep gold well bid and moving higher later in the year. Still very easy monetary policy employed by the ECB and the BoJ, and the downward yield pressure this generates, along with a growing risk that equity markets may correct, are additional factors prompting us to think gold will move into the $1,300-plus territory this year.

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