Contact us
CALL US NOW 1-888-GOLD-160

Thompson Reuters GFMS Outlook: Gold Above $1,400 in 2018

  by    0   0

Analysts at Thomson Reuters expect the price of gold to push back over $1,300 and then continue to rise above $1,400 through next year, primarily driven by overvalued stock markets, according to the GFMS Gold Survey 2017 Q3 Update and Outlook.

Gold briefly broke through the key $1,300 level in late August. Safe-haven buying served as a key driver, as heated rhetoric between the US and North Korea was at a peak late last summer. But gold fell back below $1,300 and has traded within a tight range over the last few weeks as investors mull future Federal Reserve moves and the impact of GOP tax reform – if Congress can get it done. Lackluster investment demand in the West, particularly North America, has also led to a supply surplus.

Thompson Reuters analysts say the initial push above $1,300 was an overextension of the price at the time, and they call the drop back below that level “a healthy correction for the price that has formed a base for a more sustainable move above $1,300 later this year.”

The report calls for gold to rise still further in 2018 as it averages $1,360 and hits a 2018 peak near $1,450.

The GFMS report primarily bases its optimistic outlook for gold on overvalued stock markets. As we have reported, even the mainstream has acknowledged that asset markets are bloated. In fact, Bank of America called it “irrational exuberance.” The latest fund-manager survey by the bank found that a record 48% of investors say the US stock market is overvalued.

Thompson Reuters said the growing risk inherent in key global equity markets is crucial to gold’s bullish future.

Even if this doesn’t lead to a marked correction, we believe the growing risk will spur some investors to make (or increase) their allocation in gold rather than being caught too heavily in an equity fuelled basket.”

In other words, even if the bubble doesn’t burst, leading to a precipitous crash, analysts and Thompson Reuters expect investors to begin to diversify and buy gold as they hedge against the inevitable downturn.

The report also mentions continued geopolitical tension as a factor pushing gold higher in the coming months, not only the ongoing conflict between North Korea and the United States, but also Brexit negotiations, Catalunya secession efforts, and upcoming Italian elections.

The report didn’t reveal any surprises in its supply and demand analysis for Q3. Physical demand was up 7% year-on-year at 900 tons, but that still marked the lowest level for a quarter this year. You can read more detailed analysis about gold demand HERE.

Thompson Reuters supply numbers mirrored those released by the World Gold Council, showing a 2% declined in total supply.

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Yield Curve Inverts Flashing Recession Warning; Stocks Plunge

The yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years, stoking recession fears and tanking stock markets. Yield curve inversions have preceded all nine recessions since 1955.  This was the first time the 10-year Treasury yield has dropped below the 2-year yield since June 2007 […]


China Adds 10 More Tons of Gold to Its Hoard

the country of china shown on a globeChina bought gold for the eighth straight month in July, adding another 10 tons to its rapidly growing hoard. The recent purchases boosted the People’s Bank of China’s gold reserves to 62.26 million ounces – about 1, 945 tons.  China has added about 94 tons of gold to its stash over the past eight months.


The Fed Has the US Economy on Life Support

The Federal Reserve has the US economy on monetary life support and Daily Reckoning managing editor Brian Maher says it will never again breathe on its own. As hedge fund manager Kyle Bass put it, the economy is trapped within the inescapable tractor beam of zero percent interest rates.


2019 Federal Budget Deficit Already Above 2018 Number

The federal government continues to spend America into a black hole and has already topped last year’s budget deficit with two months left in the fiscal year. The US budget deficit in July came in at $120 billion thanks to a surge in spending, according to data released by the Treasury Department. Uncle Sam spent […]


Is the Mainstream Turning Bullish on Gold?

In a podcast a couple of weeks ago, Peter Schiff said we now have all the elements of a gold bull market. Well, it looks like the mainstream might be starting to catch on. A headline at Bloomberg on Friday proclaimed “Hedge Funds Go All-In on Gold.” According to the Bloomberg report, hedge funds increased […]


Comments are closed.

Call Now