Stock Market On 'Sugar High;' Gold To Average $1,300: Jeff Christian

Gold will struggle in the first half of 2017 simply because it won't be able to compete with the dollar and the rallying stock market, this according to Jeffrey Christian, managing director for research firm CPM Group. 'Our 2017 gold forecast is a bit lower than it had been due to the Trump election. Our longer term gold forecast is higher sooner than it had been. For 2017, we are projecting an average of $1,300 for the year; first half around $1,280-1,285 and second half around $1,320,' he told Kitco News when discussing his 2017 outlook. 'We expect big tax cuts for corporations and the wealthy to flow into the stock market and attract foreign investors. Thus, we expect the U.S. stock market to rise, and the dollar to rise as well,' Christian said. However, he added that the higher dollar and stock market are on a 'sugar high' and unsustainable. The key fundamental CPM sees for 2017 is the continued recovery in private sector investment demand - from around 13.5 MM oz in 2015 to 20.0 MM oz in 2016, to around 22.5 MM oz in 2017 - as investors come back to gold after the cyclical decline in demand, Christian said.