A yearly review of gold prices in 2016 and forecasts for 2017

A yearly review of gold prices in 2016 and forecasts for 2017


The path of gold prices throughout 2016 has been full of potential for both buyers and sellers. And now, as the year comes to an end, it is time to put 2016's gold prices in context for a better understanding of what has happened this year.

But, what to expect in 2017? Find the forecasts in this article!

This annual examination will briefly go through all the important events that have influenced gold prices this year.

The how and why of gold prices during 2016

In 2016, gold prices started at approximately $1,060 but during the first half of the year, prices went up to $1,375 – 1,380 an ounce. This was due to the uncertainty caused by the unexpected outcome of the UK's EU referendum and how it would affect the global economic growth.

Nothing was clear until June-July, when gold traded as high as $1,375, which turned out to be the yearly high. After that, gold prices went down briefly only to form a double top in August. This rise in prices was driven by an increase in demand from gold ETFs; resulting in buyers acquiring 725 tons of gold during the first nine months of 2016.

After that, the movement of gold prices changed considerably. The decline began immediately after the US presidential elections on November, 8th. The US market was also reinforced by the Fed being expected to rise the interest rates, which at the same time caused gold prices to be lower. To be precise, $1,267 per ounce.

Experts claim: “2016 has been a truly decisive year”

What has been so special about 2016 for gold prices?

It has been the first time that the highest yearly price has been greater that the highest yearly price of the previous year, Gary Wagner from Kitco Precious Metals News claims, which makes 2016 a truly decisive year for gold prices.

As of today, gold has gained in value from the beginning of this year.

Forecasts for 2017: “Dollar is not that strong; it may even decline”

“And if that happens, gold gets more expensive” - added Executive Chairman Mark Mobius. His forecast for higher gold prices in 2017, despite the raising of rates by the Fed, coincides with that of the participants of last week's London Bullion Market Association conference in Singapore. The BullionVault also noted a considerable rise in demand.

Sandy Jadeja, chief market strategist at Signal Pro, and Christopher Swann, a cross asset strategist at UBS Wealth Management, have come with some more forecasts:

"I would expect the equity markets to come off (in 2017), people coming back (to gold) from a sentiment point of view, thinking maybe gold prices are so low right now maybe it's time to go back in and hedge on equities."

Sandy Jadeja

Gold will get better after some initial weakness in the shorter term.”

Christopher Swann

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