Monday , 24 April 2017


My Precious Metals Predictions for 2017: Am I Brave Or Just Stupid?

This is the time of year that those of us who are brave – or more likely stupid – come up with some gold risepredictions for the year ahead…so let’s look at what this observer considers will happen during the year ahead for the precious metals, precious metals stocks and the geopolitical drivers behind what I see as the likely price trends.

The comments above and below are excerpts from an article by Lawrie Williams (LawrieOnGold.com) which has been edited ([ ]) and abridged (…) to provide a fast & easy read.

…[I think the current] Trump bounce will likely be short lived [and, while] the Dow will almost certainly breach the magic 20000 level,…it will come crashing down as the year progresses – maybe by not as much as some ‘experts’ are warning – but a substantial fall nonetheless. This will cause:

  • the Fed to once more delay its proposed interest rate rises,
  • a rising gold price, as a result,…into the second half of the year with
  • the dollar falling in the light of Fed inaction on further interest rate rises and
  • a fallout from the realization that the Trump Presidency is not the panacea for all the US’s financial ills.

[Given the above,]…where do we see precious metals, miners and the dollar index by the end of next year?

  1. Gold could well hit $1,400 or higher.
  2. The U.S. Dollar Index falling back to 95 from its current level of around 103…
  3. The gold:silver ratio, under this scenario, falling to around 65 from it’s current 71.5 and
  4. the combination of a GSR of 65 and a $1,400 gold price could see silver soaring to $21.50. Not nearly enough to satisfy the true silver bugs – but give it time!
  5. …Platinum & palladium will not do well as industrial output does not look like it will pick up sufficiently to have a significant positive price impact, but they would likely be dragged up by the higher gold price, assuming our overall scenario is correct. We could thus see:
    • platinum at around $1,050 at some stage during the year and
    • palladium hitting $775. Nearly half the precious metals price increases though would be due to the falling dollar index.
  6. Gold and silver stocks,…failing technical and political difficulties, could well double in price from their current levels….
    • So what target prices do we see for the stocks we would likely be following. The table below is adjusted for an approximate doubling in price during the year, but with our latest assessments of prices likely to be reached on the likely performance of individual stocks above or below the overall 100% increase.

Stock

Price 29/12 Target price
Barrick Gold 16.19 32.00
Newmont Mining 34.88 70.00
Goldcorp 13.75 30.00
Gold Fields 3.16 6.00
Randgold Resources 78.53 150.00
Freeport McMoran 13.45 25.00
Hecla 5.49 12.50
Franco Nevada 60.85 110.00
Silver Wheaton 20.03 40.00
Royal Gold 66.35 130.00
Sandstorm Gold 4.06 10.00

Conclusion

…[The above predictions of pricing by the end of 2017] leave us very much hostage to fortune, however.

  • If the Trump boom and dollar strength is sustained through the year then all our predictions could well come down in flames but we live in a particularly uncertain world at the moment and in a worst case scenario – for the world that is – there are all kinds of potential outcomes for forces already in play which could radically upset the global economic and geopolitical future. 

Undoubtedly more black swans lie ahead. We live in a topsy-turvy world.

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