With a bright start in 2017, Gold has remained above par for western households. Thanks to a 4-year high since 2012, gold is now sitting at $1,171.73 (cost based on January 6th of 2017 @ 8:26 PM EST).
Is this an indication that the gold prices are expected to raise throughout the year?
Over the course of 2016, gold has gained 9.1%. This indicated the first gain since the year 2012. Amid that, the US stock indexes have also hit a record high. Not to mention, the US Treasuries raised their yields for investors. Oil has been stable with a slight spike accordingly.
Another shocker when looking at a global perspective is the fact that China’s economy has been very fragile and in most cases may face difficulties in the upcoming year. More than ever, there is a risk of greater economic uncertainty due to rising tensions and issues facing the Chinese as they march into 2017 with turbulent markets and disruptive political and socioeconomic issues that may emerge thanks to the recent elections in the United States.
What can the world expect in terms of gold prices and the overall market conditions?
According to Michael Belkin from Hyperpyron, all roads lead to gold for the year of 2017. In his interview with Eric King, from King World News, Michael states the following:
“Well, let’s put things in perspective, Eric. After Trump’s election, that was sort of a boomerang that was thrown into markets. So people dived back into the stock market and it traded higher, but underneath the surface they went risk on. So they bought financials and there was a huge outperformance in the financial sector, industrials and materials. My clients are big, global institutions that control huge chunks of money, and they are concerned about what the market is doing below the surface. Basically, everything is turning defensive. My message to them, to you, and to your listeners: Whereas before it was financials, industrials, things like that — which are risk-on cyclical’s — now it’s all defensive. So the things that were really underperforming, those are back. Those were knocked down in relative terms and I am telling people to rotate into those (defensive names). And what is going to underperform is tech, consumer discretionaries, financials. I have a fresh sell signal on financials and on industrials. So the whole Trump wave is going to reverse.” – view source.
Could this mean that we’re yet to see another possible upcoming collapse?
There is still yet so much uncertainty but it is believed that there will be volatility that hits the gold and silver markets within this year. Even yet, due to the inflationary pressures, the possibility that the prices go up on these metals are highly probable.
On the overall outlook, everyone is seemingly waiting for president-elect Trump’s inauguration and what will become of his 100-day policy priorities. Perhaps there may be unforeseen financial and political risk events to keep in mind as there is a high probability that the Donald Trump will be negotiating the new US debt ceiling.
This may directly or indirectly have an extensive impact on the rise of gold prices beyond its existing indexes. As such, through that effect, ETF’s are likely a suitable investment option for those looking to hedge any such upcoming political or financial risks.
All in all, should inflation keep at its pace and should the feds fall behind on their curve, the possibility that gold will rise is not far fetched. In fact, current trends are indicating that gold may hit a new record high this year should events play out based on market speculation.
What are your thoughts on this topic?
Do you believe that gold will rise?
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