2017 Forecast for Gold
The medium term forecast for the metal is bullish. The content of the above chart can be outlined as follows-
- There was a strong Bear run from 2013 till the end of 2015. In the first month of 2016 price broke above the Bear trend line.
- The blue triangle represents the performance of price all through 2016. And it is clear to an extent that there has been considerable pull-back towards the broken Bear resistance which has now formed a strong support.
- A higher-low (taking the lowest point of 2015 and second lowest point of 2016) has also been used to plot a bull trend line. This should likely be supported by the RSI which appears to be moving towards the neutrality (50) zone and potentially climb above it.
- The current relationship between price and the 200 moving average suggests that overall market sentiment is mildly bearish but will look to change in the mid-term.
The Fibonacci levels plotted on the chart shows price has risen above the 61.8 level (and also above the week’s pivot of 1145.0). Hence the next two target levels are 1210.8 (50.0 fib) and 1249.5 (38.2 fib), represented above by the white dashed lines. However, there is an interesting third target which price should get to in the mid-term, 1302.4. The green dashed line above represents this price, and it is key to take note of how this price aligns almost perfectly with the 23.6 fib. The price has also acted as resistance on 3 previous occasions.
FUNDAMENTAL FACTORS TO WATCH:
INTEREST RATE HIKE PLANS- The US Federal Reserve has hinted on 3 planned rate hikes in 2017. This is however not set in stone as various factors have to be considered. As a matter of fact, only 40% of traders and investors believe that 3 or more hikes will be made in 2017.
As always, Gold responds quickly to situations concerning the Dollar so attention has to be paid to the following factors which will determine the decision of the feds.
- CPI (Consumer Price Index) figures to keep an eye on inflation numbers.
- Jobs report mainly from the Non-Farm Payrolls.
- Economic policies by the new US government.
Should the American economy have a stellar first and second quarter in 2017, bullish forecasts for Gold may be altered or slowed.