Gold Price Forecasts: Jonathan Butler

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.

Jonathan Butler

Mitsubishi Corporation International (Europe) Plc, London

Gold: Range: $1,020 – $1,350

Average: $1,205

Gold remains vulnerable to a further strengthening of the dollar in the first half as US economic prospects are lifted by expectations of fiscal stimulus, while President Trump’s plans for reduced corporate taxation could lead to everhigher equity valuations, diverting investment flows away from bullion. Rising US interest rates and a rotation out of longer-dated US Treasuries may see yields break out of a 30-year downtrend, which would put further selling pressure on gold as a noninterest bearing asset. However, as the new US administration’s reflationary economic policies kick in, the real rate environment may stay favourable to gold due to higher inflation. Increased fiscal spending, which will widen the US Federal budget deficit, could lead to protracted political disputes over government debt and erode international confidence in the dollar in the longer term. Together with greater trade protectionism and/or geopolitical tensions, gold could be reasonably well supported as a risk hedge as the year wears on.

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