mandag 16. januar 2017

Gold prices for 2017?

Give me a crystal ball and I will show you the future. Give me a quantum computer 
and I will change the future. - r.w

World Gold Council is the market development organization for the gold industry. WGC has released Outlook 2017 – Global economic trends and their impact on gold. The publication is interesting and five trends might increase the price of gold.

Currency depreciation
The loss of value of a country's currency with respect to one or more foreign reference currencies.

Rising inflation
Money is worth less because of quantitative easing. A worst case scenario, is a repetition of the Zimbabwe hyperinflation scenario: You will not be able to buy a cheese-burger with a 100 trillion dollar note. You will need one thousand trillion dollars to get a mouthful of meat.

Inflated stock market evaluation
The value of current stocks are overrated. Some investors buy gold to diversify their portfolios in expectation of a stock market correction. (Flash crash?)

Long-time Asian growth
In short… Demand for gold in Asian countries will grow.

Opening of new markets
Gold-backed ETFs, pension funds increase their gold holdings, expansion into Western markets, the Shari’ah Standard for Gold, opening up the Muslim world to gold investment.

World Gold Council thinks above mentioned trends are going to push the price of gold up. However, there are many counter indications that might drive the price of gold down. A successful revitalization of the American and Russian economies. The fear in the Western World might lessen. Chinese consumers and Central bank might start to sell gold if their economy contracts.

While gold has averaged a 3 percent rise in January over the past 15 years, investor buying has helped to drive a 4 percent rally so far this month. But then again prices fell 10 percent in the six weeks after Donald Trump's election to the U.S. presidency in November. (Reuter)

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