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Gold Market To See A Major Move In December - Analyst

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Gold Market To See A Major Move In December — Analyst

(Kitco News) - Before the year is up, the gold market might see some excitement after all, according to one metals expert, who says a “breakout” is coming as the Federal Reserve gets ready for its December meeting.

Gold prices have been stuck in a narrow trading range since mid-October, with low volatility suppressing the markets.

But, that is about to change, partner at Vertical Research Michael Dudas told CNBC on Tuesday.

“It’s been eerily quiet in the gold and silver markets over the past few months. A breakout could happen as we approach this Fed meeting,” he said. “With this low volatility, an event can spark a move either way. We think [gold] is going higher.”

Dudas is bullish on gold in 2018 — forecasting for prices to surge to $1,400 in about twelve months from now, which is a significant rise from the current level of $1,284.

The U.S. dollar will help the yellow metal next year, with Dudas estimating the greenback’s downtrend to continue.

Inflation will also be key for the precious metal. “Inflation expectations have been muted and the Fed is hoping and praying that they can get those expectations higher. That will turn around in 2018, leading to higher inflation expectations and remaining low real interest rates, which is typically supportive of gold and silver historically,” he said.

When it comes to the U.S. tax reform, gold might see a move lower in the short-term, but additional investment, demand, and capital spending could trigger an increase in wages in the long-term. “So, actually, it could be a backdoor positive,” Dudas explained.

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.