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'Not Bullish' on Gold Price Says RBC Capital Markets

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(Kitco News) - With Q4 in full swing and gold prices struggling to breach $1,300 an ounce, one bank analyst says he isn’t so hot on the yellow metal – at least over the short term.

“Overall, for the rest of 2017 we are not bullish on prices, especially with a rate hike still expected this year,” Christopher Louney, commodity strategist for RBC Capital Markets, said in a research note Thursday.

Gold prices have fallen under pressure as expectations of further tightening by the Federal Reserve have boosted the U.S. dollar. The metal trades inversely to the greenback so any strength in the U.S. currency hurts gold prices.

December Comex gold futures last traded up 0.62% at $$1,296.90 an ounce on the day while the U.S. dollar index was last seen at 92.98, relatively flat on the day.

And, even if gold has gained some momentum on heightened geopolitical risk, particularly in Europe, Louney thinks it is already baked into the price.

“Gold has gotten a bid from another geopolitical risk in the form of Spain/Catalonia – a situation which continues to unfold and the tension of which is currently priced into the gold market in our view,” he said.

However, Louney is not an outright bear and remains optimistic gold further out. “We are looking more towards 2018 for strength,” he wrote.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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