What a Difference a Day Makes for Gold

0
185
gold stocks jan27-2017

Global wealth management firm, UBS, seems to believe that gold prices are starting to recover because the optimism running rampant since the presidential election is starting to fade somewhat as reality sets in. Although there were also qualification for caution included, the Swiss financial management firm issued this statement:

“We think this is warranted and see room for gold to extend upwards as markets digest uncertainty around U.S. fiscal policy. But gold has also recovered considerably and market uncertainty at this point could encourage investors to lock in whatever profits they can for now, especially as seasonal gold demand fades.”

Even though gold is over 6 percent down since the election, it is still is actually showing an almost 8 percent gain over the last 12 months. The general consensus, though, is that there will be a decline in demand due to the Chinese New Year holidays starting on Friday and closed markets next week.

Analysts are not only starting to revert back to correlating gold prices with economic uncertainty, but with political uncertainty, as well. And while gold prices currently remain under pressure, there are widely expressed expectations that gold could certainly reach $1,300 an ounce in 2017.

The statement from UBS noted that gold prices have seen considerable recovery just since the first of the year, with gains of more than 5 percent. That was largely due to the slight weakening of the dollar, as well as global uncertainty about the policies President Trump has enacted thus far. The combination of these factors allowed gold prices to reach highs that hadn’t been seen in two months.

Many opinions from December had stated expectations that gold might rebound in 2017, but probably not until the middle of the year. The UBS statement seems in line with that. Near future prices declining, followed by an upswing.

 

 

LEAVE A REPLY