Gold bullion investment will rise for the fourth straight year in 2017 as global political and economic factors are forecast to maintain buying interest, CPM Group said on Tuesday.
“There has been a return of opportunistic generalist investors who had exited gold in late 2011 and early 2012,” New York-based CPM Group said in its Gold Yearbook 2017.
CPM forecast gold bullion investment at 17.6 million ounces in 2017, up from 17.4 million ounces in 2016 and the highest since 2012 when it was 29.2 million ounces.
The independent commodities research company pegged global gold coin demand at 7.5 million ounces in 2017, up from 7 million ounces in 2016 and the highest since 2013.
“Most long-term gold investors do not seem to expect the world`s financial and political systems to collapse. Rather, they see them as facing major structural problems that will not be easily resolved or repaired in any short period of time,” CPM said.
“In the near- to medium- term as it is becoming clearer to (shorter-term investors) that, while there may not be a collapse in the financial system, clearly the present interest rate environment, global economic growth profile, levels of unemployment and underemployment, and political turmoil globally are all factors that warrant owning at least some gold as a portfolio diversifier.”
The lack of clarity regarding the outcomes of US President Donald Trump`s campaign promises and interest rate increases by the Federal Reserve to raise interest rate hikes is expected to prevent precious metals prices from taking a clear direction in 2017, CPM said.
Source: Zee News