MANAMA: The US debt dynamics are expected to turn positive for gold in 2017. While trump policies may either boost or slow down the US economy, the subsequent levels of the country’s debt, which stands over USD 14 trillion, will have a conscious impact on the overall outcome. Any mistakes on the policy front, coupled with the higher interest costs and rising debt ceiling could mean a bullish scenario for gold, says Mihir Kapadia, CEO and Founder of Sun Global Investments.
While gold futures has rallied upwards by 1.5% to close at $1,157.70 on Thursday, the burst in movement towards the close of the market into the holiday week has been relatively surprising. This is indicative of the volatile nature of the commodity, which tends to swing over spontaneous market fears.
“Looking ahead into the long term, peak gold is a factor we have to consider for 2017 apart from the Trump presidency. The rarity of gold is one of the factors why it’s so highly priced. According to recent reports, the number of new gold deposits discovered in 2015 is down by a phenomenal 85% since 2006. This would mean 2017 is on course towards the peak gold (expected to be in 2019), before fading down until at least 2025. What we are about to experience in 2017 is therefore not one-dimensional. Gold is going to have a very interesting period ahead.”
