After rising to the highest level in more than three months, gold prices may rally in the month of January and extend it to the rest of this year.
Historically, January has turned out to the best month of the year for gold in the past four years. And David Lennox, resource analyst at Australian brokerage Fat Prophets, says the precious metal may repeat its success in 2017 through the rest of this year as well.
Last year, gold ended negative for three months and finally ended with a gain of 13.53 percent. The dollar index slipped nearly 10 percent last year and saw the biggest decline in a decade.
“Higher inflation coupled with weakness in the dollar will push price upwards,” Lennox told BloombergQuint even as he warned of higher volatility through the year. He expects a trading range of $1,500-1,600 per ounce this year.
His optimism also stems from the yellow metal's longest winning streak since mid-2011. Spot gold gained for eight days in a row, clocking an intraday high of $1319.01 per ounce on Jan 2.
The physical market could act as a constraint, Lennox cautioned, as demand is subdued amid adequate supply.
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