RBC raised gold price prediction to $1,500 an ounce

18 Jul 2016

Canadian bank RBC Capital Markets has raised its forecasts for gold prices to $1,500 an ounce for 2017, 2018 from the previous $1,300 an ounce, but expect them to decline to $1,300 in 2020, according to the bank report.“We maintain our positive outlook for gold in the current environment, given the elevated geopolitical risk in the U.K./euro zone, increasing systemic risk with increasing negative yields for government bonds and the Fed likely to pursue a more dovish monetary policy,”the bank analysts said in the report. The RBC experts are also optimistic about the gold price, as investors continued to build positions in the ETF funds.They note that the ratio of daily net inflows versus daily outflows is about 8:1.“We believe that the sharp increase in buying volumes indicates appetite for sticky, fundamental demand in the gold space, and that this should provide a support for a higher gold price as investors continue to buy any pullbacks.The influx in ETF demand in 2016 is also approaching the record level of 662 seen in 2009, as investors seek gold as a store of value and hedge against negative real rates”, the analysts also said. According to Bloomberg, the total gold reserves in ETF funds as of July 1 exceeded 2,000 tons against 1,500 tons in the beginning of the year.

Source: Uncommercial joint ownership "Trans-regional Association  of precious metals producers"