Kieron Hodgson, a commodity and mining analyst from Panmure Gordon & Co, says that despite having a bullish outlook for the U.S. dollar, all other factors are in place to push the spot gold price higher.
He lists economic uncertainty (Brexit, French elections, Chinese debt levels), concerns over high equity valuations (the U.K. now has all 10 industry groups returning positive 5-year rolling performances for the first time), trading positions (short positions were peaked around the recent U.S. rate decision and then collapsed when the conversation switched to deleveraging the Federal Reserve's balance sheet), central banks (they are now marginal buyers of gold for the first time since 2012) and indeed the pickup in inflation as being the main issues that should continue to support the price of gold.
Hodgson says that the long term trend of lower gold prices that has been in place since 2011, will come to an end due to gathering risks, which could impact record high equity markets and lead to a correction.
Panmure Gordon isn't waiting, and has upgraded its gold price forecast to $1,300 per ounce (from $1,225 per ounce) for 2017.
For 2018, they also see a rise to $1,350 per ounce (from $1,200 per ounce).
Hodgson thinks gold investors are likely to benefit from the risk of contagion linked to Brexit and U.S. inflation being pushed up by "Trumponomics".
Reference: CNBC
Read More: http://www.cnbc.com/
Thai
Eng