Gold Upward Trend to Continue but Difficult Road Ahead

Gold is likely to recover to above $1,300 an ounce next year as a pickup in physical demand counters more potential U.S. rate increases, a Reuters poll at an industry event showed.

The precious metal had lost nearly 9 percent from July’s two-year highs to trade around $1,255 an ounce on Tuesday, hit by expectations the U.S. Federal Reserve would raise interest rates in December for the second time in a year.

Next month’s closely watched U.S. election could spur some safe-haven buying, but any Fed moves will remain key to gold’s fate, according to 11 analysts, bankers, traders and refiners attending the London Bullion Market Association conference in Singapore.

Gold will end the year at $1,275 an ounce, before rebounding to $1,305 in 2017, based on the median estimates in the poll.

“The road is going to be bumpy, but the general trend next year will be upward,” said Joshua Rotbart, managing partner at Hong Kong-based bullion service provider J. Rotbart & Co. He sees the price at around $1,350 in 2017.

Rotbart said he was initially predicting gold to spike similar to its June rally after Britain’s shock vote to leave the European Union, with U.S. Republican presidential candidate Donald Trump gaining ground over Democratic rival Hillary Clinton ahead of the Nov. 8 election.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza