Gold after Trump: How Gold Performed in 2016 and Price Forecast for 2017

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We started 2016 with a strong gold price rally. It continued to grow for almost 6 months before the price started to stabilize. As with other trends on the market, gold price quickly entered a stall once everyone started to jump on the wagon.

The recent U.S. Presidential Election, as well as other factors, will continue to influence the price of gold in 2017. Before you look at the price forecast, however, let’s take a closer look at some of the most prominent factors that influenced gold prices across 2016.

The U.S. Dollar and China’s Economy

China is quickly becoming a dominant force on the global market. If you look closely at the City Index metals futures CFDs, almost all commodities are affected by news coming from China. The huge economy is also becoming a driving force for many market changes.

In 2016, Chinese speculators and investors turned to commodities, particularly metals, to hedge other investments and maintain the value of their portfolios. The metals CFD market were pushed by as far as 20% over the past few months. Gold is enjoying the biggest push.

On the other hand, the U.S. market is still one of the determining factors to look into before investing in gold. As the U.S. dollar value decreased, we’re seeing less volatility from the gold market and the price itself going down. This makes the commodity an even safer investment than before. Gold price will move parallel to the price of US dollar.

US Debt and Inflation

US debt is another determining factor that must not be ignored. As debt rises to an unprecedented level this past year alone, the burden the U.S. economy has to carry is bigger than ever. American creditors will need a lot more convincing in order for debtors to get the financing they need. Countries are seeing U.S. bonds as less attractive and they may end up going for a more tangible investment option.

Debt, along with GNP/GDP, unemployment rate, home sales, retail and manufacturing indexes, and other parameters, are signals that depict the health of the U.S. economy. The higher the inflation rate, the more people will flock into the commodities market for risk management purposes and safer investments. All of these factors have the potentials of pushing the price of gold up further.

Recent Changes and 2017 Forecast

Lastly, we have the recent Fed’s rate hike and how it triggered a gold price drop in October. While many believe that this trend will continue as we enter 2017, there is more to it than that. After the election of Donald Trump and the more recent announcements made by the president-elect, it is safe to say that it won’t be long before gold prices level off.

Gold is still a safe investment in general. 2017 will be an interesting year for the commodity nonetheless. If the trend of 2016 is to be repeated, we may be seeing gold price reaching new heights and the market for gold and other metals CFDs livelier than ever.

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