TrendsJul 18, 2025
Piece of the Week: CCWW Designs’ Shell Charm NecklaceThe charm necklace features six nautical charms of shells and coral that founder Christina Puchi collected on Florida’s beaches.
MajorsJan 20, 2017
Making Gold Demand, Price Predictions for 2017
The World Gold Council and Thomson Reuters both weigh in on what they expect in the market for the yellow metal this year.
London--While 2016 had its ups and downs, the year proved to be a good one for gold.
The metal’s price grew about 10 percent during the year, according to the World Gold Council, noting that it averaged $1,250.80 per ounce in 2016. It also has gained more than 5 percent since the Federal Reserve increased interest rates in mid-December.
For 2017, Thomson Reuters is forecasting an average price of $1,259 per ounce for gold, which would be a slight increase over the 2016 average that the WGC reported.
The strength of the U.S. dollar likely will remain a headwind to further price increases, at least in the first half of 2017, according to Ross Strachan of Thomson Reuters. Additionally, there aren’t many indications that Asian demand, which declined substantially last year, will pick up again just yet.
However, as the year progresses, there is a likelihood of flows of capital into safe-haven investments, possibly spurred by election results in some European countries and the increasing chances of another country leaving the European Union, he said. This will push up the price of gold.
While it doesn’t make price predictions, the WGC did say it believes that gold demand will remain high in 2017, noting a number of factors that will come into play this year.
According to the WGC, there are six major trends that will support demand for the metal this year.
1. Heightened political and geopolitical risks. There’s a lot of uncertainty in global politics right now--key elections will be held this year in the Netherlands, France and Germany, and the U.K. has to negotiate its exit from the European Union.
In the United States, there are some positive expectations about President Donald J. Trump’s economic proposals but there also are some concerns, especially in regards to trade between countries and “geopolitical tensions triggered by the new administration,” the WGC said.
Gold proves to be a strong investment during times of systemic crisis, the council said, adding that it expects gold investment demand to remain firm in 2017.
2. Currency depreciation. It’s likely that monetary policy will split between the U.S. and other parts of the world this year,with the Federal Reserve expected to tighten its policy while uncertainty looms with what other central banks will do. The divergence is likely to lead to fears of currency deprecation.
Since gold has outperformed all major currencies as a means
of exchange for the past century--the available supply rarely changes and is pretty dependable--this is likely to drive gold investment demand as investors look to preserve capital. Central banks also will continue to acquire gold to diversify their reserves.
3. Rising inflation expectations. Nominal interest rates (interest rates before inflation) in the U.S. are expected to increase this year but so is inflation, which could support gold demand for three reasons.
First, gold historically is seen as a valuable investment to hedge against inflation and decreased value of currency. Secondly, higher inflation will keep real interest rates low and keep gold more attractive. The final reason is because inflation makes bonds and other fixed income assets less appealing to long-term investors and, as such, more will turn to investments such as gold.
4. Inflated stock market valuations. Stock markets rebounded significantly during the last part of 2016 and stocks in the U.S. are reaching historic highs.
Generally, investors have used bonds to protect their capital from stock market correction as stock valuations increase but this becomes less of an option as rates rise and the risk of correction becomes even greater. In a time of such great systemic risks, gold’s role as a portfolio diversifier becomes especially relevant.
5. Long-term Asian growth. Gold demand is so closely related to increasing wealth in Asian economies; demand for gold has increased as countries have become richer. The WGC said that macroeconomic trend in Asia will support continued economic growth through the next few years, driving gold demand.
While changing consumer tastes have affected jewelry demand in the Chinese market, its investment market continues to boom. In India, the demonization program is expected to have a negative effect on economic growth and gold demand in the short-term, but “the transition to transparency and formalization of the economy will lead to stronger Indian growth in the longer term, thus benefitting gold,” the WGC said.
6. Opening of new markets. Gold has become more mainstream and accessible to more investors and this trend is expected to continue in 2017.
For example, at the end of last year, the Accounting and Auditing Organisation of Islamic Financial Institutions worked with the WGC to launch the Shari’ah Standard for Gold, opening up the Muslim world to gold investment, a move that one fund manager at an investment firm called a “game changer.”
3. Rising inflation expectations. Nominal interest rates (interest rates before inflation) in the U.S. are expected to increase this year but so is inflation, which could support gold demand for three reasons.
First, gold historically is seen as a valuable investment to hedge against inflation and decreased value of currency. Secondly, higher inflation will keep real interest rates low and keep gold more attractive. The final reason is because inflation makes bonds and other fixed income assets less appealing to long-term investors and, as such, more will turn to investments such as gold.
4. Inflated stock market valuations. Stock markets rebounded significantly during the last part of 2016 and stocks in the U.S. are reaching historic highs.
Generally, investors have used bonds to protect their capital from stock market correction as stock valuations increase but this becomes less of an option as rates rise and the risk of correction becomes even greater. In a time of such great systemic risks, gold’s role as a portfolio diversifier becomes especially relevant.
5. Long-term Asian growth. Gold demand is so closely related to increasing wealth in Asian economies; demand for gold has increased as countries have become richer. The WGC said that macroeconomic trend in Asia will support continued economic growth through the next few years, driving gold demand.
While changing consumer tastes have affected jewelry demand in the Chinese market, its investment market continues to boom. In India, the demonization program is expected to have a negative effect on economic growth and gold demand in the short-term, but “the transition to transparency and formalization of the economy will lead to stronger Indian growth in the longer term, thus benefitting gold,” the WGC said.
6. Opening of new markets. Gold has become more mainstream and accessible to more investors and this trend is expected to continue in 2017.
For example, at the end of last year, the Accounting and Auditing Organisation of Islamic Financial Institutions worked with the WGC to launch the Shari’ah Standard for Gold, opening up the Muslim world to gold investment, a move that one fund manager at an investment firm called a “game changer.”
More on Majors
The Latest
TechnologyJul 18, 2025
Brad Campbell, John Liebler Join Clientbook’s Executive Team Campbell joins the company as vice president of business development while Liebler is the new vice president of operations.
CollectionsJul 17, 2025
2026 Winter Olympic Medal Design Symbolizes UnityThe medals feature a split-texture design highlighting the Games’ first time being hosted by two cities and the athletes’ journeys.
Brought to you by
Investing in the Next Generation of Bench JewelersThe Seymour & Evelyn Holtzman Bench Scholarship from Jewelers of America returns for a second year.
Supplier BulletinJul 17, 2025
The INSTORE Jewelry Show 2025: Your Holiday Preparations, All Wrapped Up! Sponsored by The INSTORE Jewelry Show 2025
Weekly QuizJul 17, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
SurveysJul 17, 2025
The Most Recommended Brands in the World, According to YouGovGlobally, travel and transportation brands reigned, while in the U.S., alcoholic beverage companies and a lingerie brand took the top spots.
IndependentsJul 17, 2025
Gina Ferranti of GiGi Ferranti Jewelry Dies at 59The Brooklyn-based jewelry designer is remembered as a true artist and a rare talent.
Brought to you by
Jewelers of America is Headed to Las Vegas for JCK 2025The countdown is on for the JCK Las Vegas Show and JA is pulling out all the stops.
SourcingJul 17, 2025
Rio Tinto Names New CEO, Production Rises at DiavikProduction at the mine in Canada’s Northwest Territories topped 1 million carats in Q2, the third consecutive quarter of growth.
Events & AwardsJul 17, 2025
JA to Hold Learning Workshops This FallA new slate of Learning Workshops will take place in Oklahoma, Mississippi, and Georgia.
SurveysJul 16, 2025
Signet Jewelers Falls Lower on NRF’s ‘Top 100’ Retailers ListThe middle class is changing its approach to buying jewelry and affordable luxury goods, the NRF said.
FinancialsJul 16, 2025
Richemont’s Jewelry Sales Up 7% in Q1It marks the third consecutive quarter of growth for Cartier, Van Cleef & Arpels, Buccellati, and Vhernier.
WatchesJul 16, 2025
The Top-Selling Rolex Models of the Last 15 Years, According to Bob’s Watches The reseller’s market trends report, based on its sales data, also shows exactly how much Rolex prices have jumped since 2010.
AuctionsJul 16, 2025
Christie’s To Honor Dinh Van With ExhibitionThe auction house will be hosting a retrospective paying tribute to jeweler Jean Dinh Van and his company’s 60th anniversary.
IndependentsJul 16, 2025
Clyde Duneier Ushers In Fourth GenerationJake Duneier and Danielle Duneier-Goldberg have stepped into the roles of CEO and president, respectively.
CollectionsJul 15, 2025
Boucheron’s New High Jewelry Calls Attention to Nature’s ImpermanenceThe “Impermanence” collection contemplates nature through the Japanese art of Ikebana (flower arranging) and philosophy of wabi-sabi.
MajorsJul 15, 2025
James Avery Expands to 2 More StatesThe Texas-based jewelry retailer has set up shop in Tennessee and Arizona.
Events & AwardsJul 15, 2025
Neiman Marcus Vet Joins Couture as Brand Director Eric Ford will step into the role, bringing with him decades of experience.
MajorsJul 15, 2025
Ben Bridge Jeweler Acquires Olympic ManufacturingIn addition to improved capabilities, the acquisition will allow the jeweler to offer support to other independent jewelers.
CollectionsJul 15, 2025
Guzema Debuts First Colored Gemstone JewelryThe “Celestial Blue” capsule collection campaign features Olympian Kateryna Sadurska.
MajorsJul 14, 2025
Nanis Opens First StoreThe seasonal store, located in Mykonos, Greece, offers exclusive events, personal styling, and curated experiences.
IndependentsJul 14, 2025
It’s the Summer of Love at Long’s JewelersThe New England jeweler is hosting a bridal event for the month of August.
SourcingJul 14, 2025
Ethical Gem Fair Heads to SeattleThe trade-only event will host its debut fair in the Emerald City later this month.
Events & AwardsJul 11, 2025
The Edge’s Annual Conference Returns in SeptemberIts sessions will focus on inventory strategies, staff performance, retention and acquisition, emerging market trends, and more.
CollectionsJul 11, 2025
Piece of the Week: Miseno’s ‘Arco’ EarringsFor its 10th anniversary, Miseno designed the “Arco” earrings based on the Arco Felice, an arch conceptualized in A.D. 95 in Miseno, Italy.
Policies & IssuesJul 11, 2025
James Avery to Donate $1M to Texas Hill Country Relief EffortsThe jewelry company is one of several contributing to relief efforts in the region after the recent floods.
TrendsJul 11, 2025
Kelly Osbourne’s Engagement Ring Is Sweet as HoneyInspired by fiancé Sid Wilson’s nickname for her, the white and yellow diamond ring features a unique honeycomb design.
