Donald and Melania Trump's 66th-floor penthouse in Trump Tower offers stunning views of Central Park and the Manhattan skyline. Its three storeys feature floors, walls and columns covered in marble, while the crown molding, glasses, platters, vases and lamps are all gold. In fact, the gold-plated portico of the tower at 725/5th Avenue, New York, in its own way, performs as an elegant entrance into the Trump Era, a new age for gold as choice for investors.
Gold has been known to be a “safe haven” for investors over the years when significant market uncertainty looms. Gold trade started rising as the US election fever in June picked up and polls began showing that the race between Trump and Hillary was getting tight.
The trend showed a lot of fluctuations when Trump’s ratings swung low and the race was starting to get more predictable. But then enter November, when Trump managed to recover in publicity and popularity, and the race became tighter: hence, another spike in gold prices. And this upward trend continued until election day after which the gold price dipped and has been on a downward trend ever since.
While the precious metal has always been stockpiled in times of trouble, a bevy of political and economic surprises in 2016 sparked a surge in buying that sent gold to the first annual gain in four years. Prices may rally 12 per cent 2017, according to a Bloomberg survey of 26 analysts.
The upbeat outlook is the risk of chaos on a number of situations, from a possible trade war due to America's economic frays with China, alleged Russian hacking of American political groups, the UK’s complicated Brexit, right up to the rise of nationalist groups in France, Germany, and the Netherlands.
Gold bugs in Dubai who are looking for another buying opportunity this year may not be disappointed, with prices forecast to drop further due to a strong dollar and interest-rate-hike expectations. Gold for immediate delivery is up 9.5 per cent this year to about US$1,162 per ounce, halting a three-year slide.
More than two-thirds of the analysts and traders surveyed from Singapore to New York said they were bullish for 2017. The median year-end forecast was US$1,300, with the year's peak seen at US$1,350. Two market analysts went even further by predicting the precious metal may reach US$1,600.
Four of the analysts in the Bloomberg survey predicted that bullion would drop below US$1,000 in 2017, particularly if the Federal Reserve raises interest rates three times next year and Mr Trump makes good on his pledge to boost infrastructure spending to spur economic growth, as stated in his campaign “Make America Great Again”.
OCBC Bank's Barnabas Gan, an economist whose prediction was the most accurate among gold forecasters tracked by Bloomberg in the third quarter, sees the metal falling to US$1,100 by the end of 2017.
Still, hope remains. On January 2, UBS bank saw an average price of $1,400 per ounce across 2017, while Credit Suisse forecasted gold to peak at $1,500 per ounce in the first quarter 2017. Later, on January 4, gold prices finished the day with modest gains. The metal plunged as the US dollar jumped upward alongside benchmark US Treasury yields and S&P 500 futures as better-than-expected manufacturing ISM data crossed the wires. A mere 10 minutes later, the markets reversed course. Gold rallied to session highs as yields, the greenback, and stock futures tumbled.
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