Equity world : Price of Gold in 2017 Predicted to Decline

Equity world-Predicted gold prices tend to weaken in 2017 as the global economic recovery and the policy interest rate tightening by the Federal Reserve.

In trading on Friday (9/12) at 18:52 GMT, spot gold prices fell 5.47 points, or 0.47% heading to US $ 1,165.31 per troy ounce. The rise in prices throughout the year dropped to 9.8%, after earlier reaching 28.77% on July 8, 2016.

Gold's rise driven by a weaker dollar. At the close of last week, the dollar index fell 0.27 points monitored or 0.27% toward 100.77. This figure shows an increase of 2.17% over the current year.

Barnabas Gan, an economist at Oversea-Chinese Banking Corp (OCBC) of Singapore, said the trend of the gold price in 2017 will be weaker. In the first quarter, the price will be in the position of US $ 1,175 per troy ounce, the second quarter of US $ 1,150 per troy ounce, the third quarter of US $ 1,125 per troy ounce, and $ 1,100 in the last quarter.

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The gold price has now declined over the last five weeks due to the election of Donald Trump as president of US economic growth increased optimism Uncle Sam and plans pengerekan Fed interest rate. It is estimated that the US central bank will raise interest rates twice in 2017.

"In the near future, interest rates are expected to rise 25 basis points next week. It will strengthen the dollar and hit gold," he said as quoted by Bloomberg, Friday (12/09/2016).

Streetwise Reports LLC in delivering research, pengerekan expectations of Fed interest rate in December led to a stronger US dollar, while gold continues to weaken. When falling below $ 1.100, the price will move at US $ 1,075 - US $ 1,080 per troy ounce.

"In the near future there are still opportunities to bounce price, but selling still dominate," he said.

Pengerekan Fed interest rate does not necessarily make the gold market was destroyed, because in two to three months the price will improve. One contributing factor is the growth of global inflation expectations reinforce the trend of negative interest rates.

According Streetwise, a negative interest rate environment makes the price of gold flourish. A number of central banks that implement negative interest rates is Japan, Switzerland, Denmark, Sweden, and Europe.

The central bank decision Negative Interest Rate Policies (NIRP) indicates the projected global economy has not been good, so the demand for haven assets such as gold will increase.


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