After suffering some losses, gold is gaining points again. Asia physical gold buying that is being experienced right now achieved a boost for the precious metal prices in the international markets.

Past week wasn’t amazing for the yellow metal, having terrible sessions in front of a growing U.S. Dollar. But both yesterday and today are different, ending a losing streak from past sessions.

On Monday, spot gold was up 0.4 per cent. Today it went up 0.3 per cent, reaching US$1,217.35 per ounce troy. These numbers reflect values by 0628 GMT. Regarding gold futures, they closed Monday’s session at US$1,217.50 per ounce.

Now the U.S. Dollar rally slowed down, gold seems more attractive, mostly in front of everything that is going own.

Eastern Demand

When this kind of things happen, we wonder why. Gold prices have been so high this year that Indian jewelers were afraid of retail sales. They thought that a smaller public would be capable of purchasing gold, amidst a jewelers’ strike and a few years of a bad monsoon.
Oddly, all things changed for good. The jewelry industry satisfied its demands, 2016 monsoon was outstanding all across the country, and the gold prices went down significantly (by a couple hundred of Dollars in comparison with recent peak).

Now, the Southern Asia economy is facing the wedding season and other relevant events in India, all of them stimulating the demand to buy gold. The low prices in the precious metal have become an open door for wealthy Indians to buy all they can afford in gold.

Negative Forecasts

While the gold is going up based on the events happening in Asia, relevant players in the financial industry aren’t having too much faith in the future. As a proof of that, Goldman Sachs changed its three-month and six-month gold price forecasts for the worst, lowering the estimated price to US$1,200 per troy ounce.

Mr. Edward Meir, INTL FCStone analyst, told the media that “We still expect gold to struggle against a host of bearish elements that remain arrayed against it, including a stronger dollar, soaring equity markets and the prospect of further rate hikes that could follow the widely-expected increase slated for next month.”

Most negative forecasts are based on a highly probable interest rates hike from the FED next month, including the current growth of the U.S. Dollar.

But, what these forecasts aren’t including is all those threats present on the horizon right now. We can point out things like the arrival of president-elect Donald Trump to the Oval Office, the dramatic measures he is proposing in terms of taxes, trade, infrastructure, and military, the civil unrest caused by Trump’s victory, the Italian constitutional referendum, everything related to the Brexit, and many more.
If we mix all those things, three of the main currencies (the U.S. Dollar, the Euro, and the British Pound) will be greatly affected, along with the stock market. This could automatically trigger a hike in gold prices, mainly because the great uncertainty the markets could represent during 2017 since its early months.