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.
INTL FCStone, New York
Gold: Range: $1,080 – $1,420
Gold finished up 9% in 2016, snapping three years of consecutive declines, but it was still a disappointing year for the bulls given that a much healthier advance faded by year-end. Looking ahead, it is tempting to suggest that we could see further downside in gold, especially if the late-2016 headwinds (a higher dollar and higher US rates) reassert themselves. While this is a possibility (and incorporated in our high-low forecast), we think other variables have the potential to offset these bearish concerns and arrest a protracted downward spiral. For one thing, there are critical elections that will take place this year in France, Italy, Germany and Holland, where at least some (if not all) establishment parties could be forced out of office. This would be a game-changer for gold, as it could destabilise the euro and provide a fertile background for a sustained advance, not too dissimilar from what we saw in 2011 during the Greek crisis. In the US, for all the talk of Trump, policy details remain incoherent and Congress may not fall in line with all of the President initiatives, something that could knock the dollar (and equities) back. Trump could singlehandedly have more of an impact on the trade side, as moves towards protectionism might unnerve the markets and provide another lifeline for gold. On the physical side, we also wonder whether gold will have as bad a year in 2017 as it did last year with regard to Chinese and Indian buying – Chinese gold demand in Q3 2016 was down 22% from 2015 levels, while Indian gold buying was off 28%. In 2017, we see a $1,080-$1,420 range on gold, with an average price of $1,275.