Reasons to Believe that 2017 Will Be an Excellent Year for Gold

We will never run out of optimists when it comes to gold. Even during its darkest hour, the golden metal had a strong fanbase, always looking to raise the hype and convert non-believers into investors. 2016 was simply amazing for gold buyers and investors, opening the door to new opportunities and record-breaking numbers.

But after the surprising results of the U.S. elections, gold lost its momentum and the first worrying drops of the year were experienced.

Nevertheless, that’s the past and we now care about the future: 2017 and what will come with it.

In a recent article from Sean Williams, a contributor for The Motley Fool and published by NASDAQ, very solid points were made about gold and its possible opportunities for this year. The reasons pointed out by the author try to make us see how the yellow metal can greatly benefit from the many things happening right now. In fact, Mr. Williams is almost certain that the gold troy ounce will hit the US$2,000-mark, something quite ambitious.

Financial Elements in the Equation

The article in question talks about how the opportunity costs of investing in gold remain quite low. Mr. Williams compares the actual situation of gold with the different low-risk alternative we have at hand, like the U.S. Treasury Bonds.

But beyond the opportunity costs, which is something most people seem to ignore, we must mention a strong fact: the FED and its poor handle of the economic matters, at least in the eyes of many investors. During the recent years, we saw how the FED played with our minds, talking us about interest rate hikes that didn’t happen at all.

The financial world is not happy about it. The FED talked about four estimated interest rate hikes for 2016, only applying one by the end of the year. Investors who are betting on the US Dollar may be blind: they see a unique interest rate hike as something awesome, but it actually is a proof of its inconsistency.

The Uncertainty Factors

Gold always benefits big time from uncertainty, doubt, and fear. When the problems are around the corner, investors leave fragile currencies and stocks behind, looking for something more solid. This is an almost-bulletproof scenario.

So, if we take all the uncertainty that is taking place right now and consider it as a serious element for increasing gold prices, the outcome is quite clear. First, we have Mr. Trump and the highly dramatic measures he is planning to take once he gets to the White House. What he is proposing has the potential to drastically influence the global economy, including weakening the U.S. currency.

Beyond what he can do, we must consider other elements like the Brexit and Chinese crisis. Regarding the Brexit, Mr. Williams thinks that it’s an ongoing event that will still influence the economy of the European block in many ways, creating a shockwave for the rest of the world.

China’s recent economic problems represent a serious issue for global stability as well.

This problem may become more severe when Trump takes the power, increasing the chance of a trade war.