Analysts at two of Canada’s major investment banks are advising clients to purchase precious metals to take advantage of an expected early year seasonal jump in gold prices. Royal Bank of Canada sees a repeat of last year’s bullish start to the year, while CIBC predicts gold may hit its high for the year in January. U.S.-based Goldman Sachs also predicts positive returns for gold in the first quarter, driven in part, by strong jewelry demand from China before Chinese New Year on February 16.
Gold jumped out of the gate in 2017, leaping from $1,156 to $1,257 an ounce by late February. In 2016 as well, gold rallied early in the year, climbing from $1,060 to $1,239 an ounce in mid-February.
Royal Bank of Canada anticipates gold will trade at an average price of $1,303 in 2018. CIBC anticipates gold will cool after the first quarter, trading in a range of $1,250-$1,275 an ounce.
Other investment firms are more bullish on gold through the year. Bank of America/Merrill Lynch sees buyers returning to the gold market if the strong economy continues pushing inflation higher, with gold reaching $1,326 an ounce. Scotiabank forecasts a modest rise for gold at $1,300 an ounce.
After the early-year rally in 2017, gold spent the year trading in a range between $1,200 and $1,345.