RBC Capital Markets has upped its 2016 average gold forecast by 9% to $1,250 an ounce, describing the outlook as positive in the second half of the year due to a more dovish posture from the U.S. Federal Open Market Committee, declining real interest rates and improving physical demand.
“For the balance of 2016, we expect gold to trade in a broad $1,200/oz to $1,300/oz range with the gold price improving over the course of the year,” RBC said in a research report Sunday.
The bank upped its 2017 forecast by 8% to an average of $1,300. However, RBC left its average silver forecast at $15.50 for 2016 and $16.50 in 2017.
As of 11:04 a.m. EDT, Comex June gold was $15.30 higher to $1,259.10 an ounce, while May silver was up 48.6 cents to $15.87.
“We expect precious metal prices to remain volatile for the foreseeable future while the market assesses the outcome of the dovish FOMC posture,” the bank said. “RBC now forecasts a single rate hike in 2016, and we believe that this ‘low and slow’ path has been discounted into a $1,250 gold price. A dovish Fed outlook into 2017, growing inflation expectations or a financial market shock would lead to further upside for gold.”
Reference: Kitco
Read More: http://www.kitco.com/
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