Gold Price Forecasts: Nikos Kavalis

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.

Nikos Kavalis

Metals Focus, London

Gold: Range: $1,100 – $1,460

Average: $1,285

Metals Focus believes that the recovery seen over the first two weeks of 2017 will likely set the tone for the rest of the year. This view ultimately rests on our scepticism towards the exuberance of global markets following the US election. Instead, we expect that the factors that buoyed gold investment over the first half of 2016 will remain relevant this year. First, whether the Fed hikes two or three times, short term real US rates will stay negative throughout the year, weighing on the US currency. Second, so too will real, and in some cases even nominal, rates across other key reserve currencies. Third, the tail risks that encouraged safe-haven interest in gold last year will persist this year. Related to all three points, we struggle to see a strong acceleration of the US economy. Already, expectations towards the ability of the new administration to meet its early fiscal promises are being scaled back. However, gold will still face several challenges this year. Investor confidence was clearly shaken during the last few weeks of 2016 and many investors will be slow to return. The lack of fundamental support, with physical demand in the two largest markets of China and India under pressure, is also a problem. Overall therefore, we believe that price gains will be modest and we forecast a full year average for 2017 of $1,285, up 3% year on year.

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