3 Key factors guaranteed to move gold in 2017
Duncan Richardson, News Editor
5 Jan 2017, 10:24 a.m.
After a three-year losing streak the gold price posted a 31.8% return in 2016. The gain would have been a lot higher if the price had not declined following Donald Trump’s surprise victory in the U.S. election. As we begin 2017, the gold price will be looking to build upon its £933 per ounce starting point. Traders care little for the past and their focus will now shift to examining the potential drivers for the price in 2017.
It comes as no shock the main driver behind the price will be the actions of the Federal reserve. If the Fed follows through with multiple rate hikes gold will likely suffer as the dollar strengthens. However, when you consider that the Fed has only managed to raise interest rates twice since the 2008 crisis this seems optimistic.
The final catalyst could the actions of the Indian consumers. In 2015, China overtook India as the largest consumer of gold as the Indian government restricted imports in attempt to reduce gold ownership. 2016 was the year the Indian government removed over 80% of the countries bank notes from circulation and should this back fire the Indians will rush back to the yellow metal.