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What Do Gold Investors Need to Know about Its Outlook?

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Part 3
What Do Gold Investors Need to Know about Its Outlook? PART 3 OF 9

What Do Analysts Have to Say about Gold Prices?

Median gold forecast

It is important to look at Wall Street analysts’ assessments on the outlook for gold prices, which could help us understand the reasons behind the outlook and the path that gold investments could take. Gold investments include physical gold, ETFs such as the VanEck Vectors Gold Miners ETF (GDX), and equities such as Franco Nevada (FNV), Eldorado Gold (EGO), Alamos Gold (AGI), and New Gold (NGD). 

In this article, we’ll examine analysts’ views on the outlook for gold.

What Do Analysts Have to Say about Gold Prices?

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Morgan Stanley

Regarding the comparisons between Bitcoin and gold, Morgan Stanley (MS) equity strategist Tom Price believes that while gold has demonstrated its ability to persevere and preserve its value under all circumstances, Bitcoin’s platform “literally requires the lights to stay on.” 

Price added that the view of this immature currency (Bitcoin) being superior to gold as an inflation and uncertainty hedge still needs to be tested.

HSBC and UBS

HSBC’s chief precious metals analyst, James Steel, expects moderately higher gold prices going forward. He believes that a weaker dollar and tighter monetary policies could continue to weigh on gold. While a weaker dollar is usually positive for gold, tight monetary policy is bearish for gold’s outlook.

Steel also believes that the geopolitical risks and policy uncertainty regarding the US administration could also boost gold prices. The firm, however, kept its gold price forecast for 2017, 2018, 2019, and the long term unchanged.

In a research note released in August, UBS research strategist Joni Teves said that while an upside for gold still exists, it might be limited due to the bullish momentum in risky assets such as the Dow Jones Industrial Average (DOW) (DIA) and the S&P 500 (SPX) (SPY). She also cited softer inflation and other weaker economic data as being supportive of gold, especially if it creates uncertainty around the Fed’s policy expectations.

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