A Gold Investor's Guide to the Potential Rate Hike in 2017

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Part 2
A Gold Investor's Guide to the Potential Rate Hike in 2017 PART 2 OF 12

A Look at Analysts’ Forecasts for Gold Prices in 2017

Median gold forecast

Looking at Wall Street analysts’ views could help investors understand the reasons behind gold’s price outlook and help them decipher the path that gold investments are likely to take.

A Look at Analysts&#8217; Forecasts for Gold Prices in 2017

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Gold investments include physical gold, ETFs such as the VanEck Vectors Gold Miners ETF (GDX), and equities such as Agnico Eagle Mines (AEM), Gold Fields (GFI), and New Gold (NGD).

RBC and Citigroup’s take

RBC believes that three rate hikes have been priced into a $1,200 per ounce floor gold price and $1,300 per ounce ceiling. It believes that, under such a scenario, four gold stocks could be worth considering. Newmont Mining (NEM), Kinross Gold (KGC), Royal Gold (RGLD) and Silver Wheaton (SLW) are the stocks that could “outperform,” according to RBC.

Goldman Sachs and HSBC

In a report issued on March 10, 2017, Goldman Sachs analyst Abhinandan Agarwal stated that “As the market begins to re-price its expectations of rate hikes this year, we believe it could be a significant negative catalyst for gold. However, given that some of the policies being put forth by President Donald Trump (like trade barriers and border adjustment tax) could be beneficial to gold, we take a more neutral view on gold prices going forward.”

According to Reuters, HSBC analyst James Steel said that “The (gold) rally appears intact, but we think a near-term bout of profit-taking may materialize at any time, especially if there is a slowdown in ETF accumulation demand or reduced long participation on the Comex.”


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