Gold Investing: Where is the Gold Price going?

It goes without saying that the gold price fluctuates not only on a daily basis, but also minute by minute. The rapid change can make gold investing challenging, especially when the geopolitical climate is experiencing shifts.
In the first quarter of 2017, increasing uncertainty worldwide sent investors toward safe-haven assets, boosting the yellow metal. It steadied above the $1,200-per-ounce mark during the period and reached its highest point on April 11, at $1,287.71.
But lately concerns over geopolitical tensions have started to fade, and investors have become hungrier for riskier assets.
“Combined with a moderation in confrontational foreign policy rhetoric from the Trump administration in May, a ‘market friendly’ election result in France is helping to unwind demand for gold to hedge against political risk,” BMI Research says in a note.

“Receding risk aversion in Europe and hawkish language from the US Federal Reserve will cap gold demand in the near term,” BMI also notes. The firm recently cut its 2017 average gold price forecast to $1,250 from $1,300.
Similarly, analysts at Goldman Sachs (NYSE:GS) are keeping a bearish outlook for gold, calling for a price of $1,200 in the next three months.
“The key catalysts we see for this move will be markets repricing to reflect higher US rates, a faster Fed balance sheet normalization, increased expectations of US tax reform, and stronger [economic] growth,” analysts at the firm said in a recent note.
Gold suffered its largest weekly loss of the year last week, hit by the US Federal Open Market Committee meeting and by stronger-than-expected US jobs data.
“Gold has lost its appeal as a safe-haven … markets are refocusing on the growth momentum in the US and prospects of future rate hikes,” Argonaut Securities analyst Helen Lau said at the time.
The gold price was also under pressure on Tuesday (May 9), touching a two-month low of $1,213.81. Experts believe the market is pricing in around a 90-percent chance that the US Federal Reserve will increase rates in June. What’s more, the Fed is expected to hike interest rates three more times this year.
“The big signs for gold are going to be a combination of interest-rate movement and stock market fear as we enter the seasonally weak months of the year (May 1 through Halloween),” said Adam Koos, president of Libertas Wealth Management Group.
“If stocks start to stumble toward the end of this month and interest rates revert to their mean, we could see some temporary upside pressure to the yellow metal,” he added.
Of course, there is a lot that can happen in a year, particularly during times of uncertainty. Investors will surely be keen to see how the gold price moves over the next few months.
On Thursday (May 11), spot gold was trading at $1,224.24 as of 2:18 p.m EST.
Don’t forget to follow us @INN_Resource for real-time news updates.
This article has been updated since being posted in 2017.
Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.

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Where is the Gold Price Going?
By Jocelyn Aspa, 2017
It goes without saying that the gold price is ever-fluctuating on not only a daily basis, but minute-by-minute, it seems. 
As such, the yellow metal reached an eight-week high on Jan. 16–a solid $1,216.50 per ounce–although it has obviously changed since then. As of 6:17 p.m. EST on Jan. 18, the precious metal had tapered off to $1,204.55 per ounce. That said, the gold price has remained above the $1,200 an ounce mark since Jan. 16.
On Jan. 17, BullionVault reported gold’s eight-week highs came at the hands of a surging British pound following UK prime minister Theresa May suggesting that Britain “cannot possibly” remain with the European single market when Brexit removes it from the political European Union.
However, as the precious metal has cooled it doesn’t come without reason: a stronger US dollar on Wednesday pushed the yellow metal slightly, “dulling investment demand for the dollar-pegged precious metal,” MarketWatch noted. The publication also pointed out that trading has been relatively quiet in anticipation of Donald Trump’s inauguration as president on Friday (Jan. 20).

Adrian Ash, head of research at BullionVault, told MarketWatch that there’s a lot of news out there “screaming for attention,” and that investors are “struggling to tell the signal from the noise.”
“Trump‘s now calling for a weaker dollar but inflation has already breached the Fed’s 2 percent target,” Ash told the publication. “That makes gold look good for 2017, because as real interest rates fall, the currency will devalue at a faster rate.”
That said, others are suggesting a gold price correction is on the way. In the Mining.com article, it writes that gold has historically started the new year off on a bang–rising almost two-thirds of the time since January 2000.
Simona Gambarni, analyst at Capital Economics, has suggested the 2017 gold rally “may be shortlived.” As seen in the article, Gambarni said:

First, we expect the Fed to tighten monetary policy by more than investors are discounting, as inflationary pressures in the US build – our forecast is that the central bank will raise the federal funds rate by 25bp on four occasions. Against this backdrop, we expect the real yield of US 10-year TIPS [Treasury Inflation Protected Securities} to climb, increasing the opportunity cost of owning a real asset like gold that pays no interest.
Second, we expect the US dollar to continue to strengthen a little, as the contrast in the monetary policies of the Fed and other central banks proves to be much starker than investors are currently anticipating.
And third, we forecast that physical demand for gold from emerging markets and central banks will remain subdued.

Of course, not everyone will have the same gold price predictions: where some are bearish on the yellow metal, others are bullish.
As such, in FocusEconomics‘ January 2017 Consensus Forecast Commodities report, its panel is expecting “gold prices to be volatile this year amid a highly-uncertain global outlook.” Still–the report suggests that the uncertainty may result in a slight price increase, with an average of $1,211 in the fourth quarter of 2017.
That said, the report does point out that its panel has differing view on how the gold price will move throughout the year. “All panelists see prices remaining in quadruple digits, but the spread is wide,” it notes. For the fourth quarter, the maximum forecast for the yellow metal is $1,375 per ounce, while the minimum is $1,025 per ounce.
Moving into 2018, the FocusEconomics panel sees the precious metal trading at $1,272 per ounce in the final quarter.
Of course, there is a lot that can happen in a  year, particularly during times of uncertainty. Surely, investors will be keen to see how the gold price moves over the year.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.