Abhinandan Agarwal from Goldman Sachs seems to agree that the proposed interest rates could be a negative catalyst to gold prices in 2017. However, he believes that some of President Donald Trump policies could offset this downfall. Policies such as border adjustment tax and trade barriers could be key to US growth, ultimately determining gold prices.
James Steel from HSBC appears to second this. He claims that in the long term perspective, gold bull market is intact. Despite the fiscal cliff, James argues that the economic slowdown in Greece and China. This means that long term gold outlook is positive.
Joni Teves from UBS supports that low interest rates are likely to play an important role in gold prices in 2017. Should the CPI outpace interest rates, investors are likely to look for other investment options. Putting money in the bank may become an expense, resulting to investors shifting to solid assets such as gold investments.
James Turk of King World News argues that most undervalued market is gold stocks, gold EFTs and precious metals. He goes on to say that the bearish trend witnessed in precious metals won’t last forever. Political tensions favor gold prices. This is because people are likely to shift from stocks to precious metals.
Gold prices is influenced by combination of various factors such as demand and supply and political tension. No single factor influences gold prices. With the combination of these factors, gold prices is expected to break the long downtrend.