Gold: Expect Q2-2017 to be the strongest quarter for prices – Standard Chartered

Research Team at Standard Chartered believes Q2-2017 will be the strongest quarter for gold prices this year in light of political uncertainty stoking safe-haven demand, as well as physical demand recovering.

Key Quotes

“In line with our expectations, prices have continued to firm across the complex, with recent price lows being marked by the March FOMC meeting. Since the Fed hiked rates by 25bps, the weaker USD and softer 10Y US Treasury yields have provided a fertile backdrop for gold. We believe Q2-2017 will be the strongest quarter for gold prices this year in light of political uncertainty stoking safe-haven demand, as well as physical demand recovering from the lows seen at the end of 2016. In the near term, we expect prices to consolidate their recent gains.”

“We expect the USD and US real rates to set the tone for gold trading for much of the year. The absence of hawkish rhetoric at the March FOMC meeting has buoyed gold prices, and the market is now pricing in a 50% probability of a hike at the June meeting but only a 13% probability of a hike in May. In turn, price risks are skewed to the upside during April. The first round of the French elections is on 23 April and the gold-buying festival of Akshaya Tritiya takes place on 28 April in India.”