Gold Price Forecasts: Peter Fertig

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.

Peter Fertig

QCR Quantative Commodity Research Ltd., Hainburg

Gold: Range: $1,025 – $1,250

Average: $1,131

One of the backwinds for gold has turned into a headwind and this is likely to remain a driving force for gold prices in 2017. The short period of negative yields on some major 10- year government bonds is history. In the US, the trend of declining yields on 10-year Treasuries, which lasted for about 30 years, is likely to have come to an end. This year, a rise to 3% is probable, which would clearly signal that the bull market is over. Thus, opportunity costs for holding gold are on the rise. These developments in bond markets are expected to have already had a strengthening impact on the US dollar. In addition, the US economy is robust and the economy of China is also in a solid state. Therefore, the Fed has no excuse for hesitating with normalising monetary policy as the FOMC did last year. More rate hikes are on the agenda. On the other hand, the ECB extended its QE, which implies that the US dollar is likely to firm further against major currencies. Gold demand in India will suffer under the fight of the government against the hidden economy and tax fraud. Thus, beside lower demand from investors, the jewellery sector is also likely to have a negative impact on gold. However, political risks such as Brexit and elections in major EU countries could lead to a temporary rise of safe-haven buying. But this is probably not sufficient to prevent a lower average gold price compared to 2016.

 

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