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SocGen Trims 2017 Avg. Gold Forecast To $1,150/Oz

(Kitco News) - Societe Generale has trimmed its 2017 average price forecasts for gold, citing potential for more aggressive Federal Reserve tightening, a stronger U.S. dollar and subdued demand from emerging markets and central banks.

SocGen said that they see gold prices averaging $1,150 in 2017, according the the bank's latest reportIn a report issued late Friday, the bank said it was trimming its average-price forecast for 2017 to $1,150 from $1,300 previously. The full-year silver forecast was trimmed to $16 an ounce from $18 previously.

Analysts pointed out that gold’s gain of 4.2% so far in January, as of the bank’s Friday report, had outpaced the average January gain over the last 15 years of 3.3%.

“Although the price of gold may continue to benefit from time to time from the uncertainty generated by (Donald) Trump’s presidency, Brexit and European elections, it’s too early for markets to give up on the Trumponomics reflation trade,” Societe Generale said.

The bank suggested the January rally is “losing steam” and that a more sustainable rebound “will have to wait until later this year.”

“We foresee headwinds in the form of more aggressive tightening by the Fed, the stronger dollar and subdued physical demand from emerging markets and central banks, driving gold prices lower,” Societe Generale said. “As a result, we are revising downwards our gold and silver price forecast. We now expect gold prices to average $1,150/oz in 2017, compared with $1,275/oz previously.”

By Allen Sykora of Kitco News;



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