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The gold price in 2017 has pushed through resistance levels this past week. It has rallied to its highest level since November 2016.
But will gold prices sustain their newfound heights?
The good news: Seasonally, the price of gold is entering a strong period that, on average between 2001 and 2012, has seen gains of almost 4% between early April and late May.
Editor's Note: Your Free Guide to Investing in Gold and Silver in 2017
If you combine that with U.S. tensions with Syria and North Korea, investors have plenty of reason to expect gold to power higher.
But gold's recent move through its stubborn 200-day resistance level of $1,260 may cause headwinds for the metal.
Today, I'll discuss those potential headwinds and how much higher I expect gold prices in 2017 to rise.
First, let's take a look at the strong performance from the metal this past week…
Price of Gold Posts a 2.7% Weekly Gain
After settling at $1,254 on Friday, April 7, gold prices opened Monday morning lower at $1,249. This drop suggested that the U.S. missile strike on Syria was overblown. Prices recovered slightly by the close and settled flat at $1,254.
On Tuesday, April 11, gold once again shot higher as investors grew concerned about U.S. action in Syria and incendiary rhetoric toward North Korea. At the same time, the U.S. Dollar Index (DXY) retreated on weaker Treasury yields and a stronger yen. The gold price closed the day at $1,274 for a 1.6% rise.
Here's how the DXY trended this past week…
Wednesday saw the biggest action in the dollar and gold price. The Wall Street Journal interviewed President Donald Trump, who said the dollar was "getting too strong." That news sent gold higher and the dollar lower, falling 60 basis points in just 40 minutes. The price of gold settled at $1,287 for a 1% gain on the day.
Yesterday (Thursday, April 13), gold opened at the previous close of $1,287. But by mid-morning, the dollar's overnight retreat had abated and the DXY started to rebound. The metal managed to close 0.1% higher at $1,288. That's the highest level since before the election on Nov. 4, 2016.
With U.S. markets closed today (Friday, April 14) for Good Friday, yesterday's gold performance handed investors a weekly gain of 2.7%.
Does this recent popping action place gold in a new higher realm?
Maybe, but I'm not convinced yet that the geopolitical uncertainties and Trump's rhetoric about the dollar are enough to sustain recent gains. Perhaps gold will head a little higher still, but there's major overhead resistance at $1,300.
Taking all that into account, here's what I see gold doing next…
Gold Price in 2017 Will Hit These Levels
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.