Bloomberg: Analysts Forecasting Higher Gold Price in 2017

Bloomberg: Analysts Forecasting Higher Gold Price in 2017

On Monday, we saw even more signs that gold prices are firming up, driven by increased bargain hunting by investors and a weaker U.S. dollar.

The growing risks facing the global economy and the U.S. economic policy under a new president have become simply too big to ignore.

Although stock investors have enjoyed a stellar rally since the presidential election, investors like Jim Paulsen are warning that the P/E ratio of the S&P 500 rivals the highs we last saw just before the 2000 dotcom bubble burst!

 

GOLD BULLS ON WALL STREET

No wonder a recent Bloomberg survey of analysts and traders found that more than two-thirds were bullish on gold for 2017.

The median forecast among them for year-end 2017 is $1,300/oz: roughly 10% above current price levels. This performance, while far from guaranteed, would outpace gold’s solid 9% gain in 2016.

The investment pros detailed a number of risk factors they think will propel gold higher:

  • An escalating trade war between the U.S. and China
  • Growing tensions with Russia over their cyberattack tactics and abilities
  • Ongoing tensions in Europe caused by Brexit and general economic unrest
  • Significant downward pressure on the dollar and pound, leaving few alternatives besides gold and silver
  • Chinese citizens and corporations are trading in their yuans for foreign currency and assets at a high rate, raising questions about the long term stability of the Chinese currency. (No wonder George Soros has been a vocal short of the yuan since early 2016)
  • Goldman Sachs’ economic research team expects higher U.S. inflation because of Trump’s proposed tax cuts, increased defense and infrastructure spending and rising oil prices
  • Central banks continue to acquire gold at remarkable rates (271 tons in the first 9 months of 2016!)
  • Despite a nearly double-digit return in the S&P 500 in 2016, many Wall Street strategists are bearish on stocks in 2017. Even if it doesn’t crack and head down, the stock market is unlikely to repeat its torrid late 2016 performance

Gold is now trading at attractive levels for bargain hunters, especially with all the ongoing uncertainty you can feel in your wallet every day.

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GOLD & SILVER COINS

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Whether you are accumulating gold and silver long term for diversification and security, or are just into beautiful coins, you will not want to miss the Canadian Gyrfalcon.

EXPECTATIONS VS. REALITY:
A RUDE AWAKENING AHEAD 

The Fed has recently raised rates and signaled more increases to come in 2017. However, several key economic indicators are already coming in slower than expected in the new year and the prospects for these rate hikes taking place as planned are slim indeed.

President-elect Donald Trump has been a vocal critic of the Federal Reserve in the past, so current monetary policy is certainly going to come under fire. Consider that the Fed is the only central bank in the world raising rates. The Bank of Japan and European Central Bank continue to print money and have set their benchmark rates below zero.

There is no better time than now to consider how you can protect your family and your wealth no matter how history plays out.