Gold price news this past week has mostly revolved around the White House as we gradually move into the Trump administration’s tenure.
The precious metal retraced slightly in the week following Trump’s inauguration. But since then, the price of gold has risen 3.8%. As of 12:05 p.m., the gold price today (Friday, Feb. 10) trades at $1,236 per ounce.
January alone was even more impressive, with the gold price gaining 4.9% that month. I’d caution anyone to expect that pace of gain to continue through the rest of this year. But the common saying is “as goes January, so goes the year.” And January clearly marked the start of a long-term rally in 2017.
On the sentiment side, we have more encouraging news. The World Gold Council just reported that gold-backed ETFs increased their holdings by 1% last month. And one of the world’s greatest investors moved back into gold in late December and January, just as gold prices bottomed.
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This investor has long held huge influence over the gold market, and his moves could have a big influence on gold prices in 2017.
First, here’s why gold is enjoying another weekly gain…
Gold Price News: Futures on Track for a 1.3% Gain This Week
After ending the previous trading week on a bullish note, the gold price continued rallying on Monday, Feb. 6. It opened at $1,228 then settled higher at $1,235 an ounce. That marked a 1.2% gain from the Friday, Feb. 3, close of $1,220.
On Tuesday, gold prices started to consolidate after the two previous strong daily gains. Gold tumbled 1.1% lower from the last closing price to settle at $1,233 on the day.
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But the metal saw revived buying action on Wednesday. Prices opened higher at $1,239 and closed at $1,241 for a 0.6% gain.
Then on Thursday, around 10:00 a.m., the price of gold dropped from $1,244 to $1,234 within minutes as the U.S. Dollar Index shot up from 100.20 to 100.57.
Here’s how that looked…
As the dollar gained throughout the day, the gold price remained weak. It eventually closed at $1,237 for a 0.3% loss on the day.
As of 12:05 p.m., the price of gold today (Friday, Feb. 10) is down 0.1% and trading at $1,236. Despite the two straight days of losses, gold is still on track for a weekly gain of 1.3%.
A second consecutive weekly gain for the gold price is a healthy indicator of a long-term rally. But I’ve also identified three fundamental indicators that point to higher prices in 2017.
Here are those three indicators – one of which involves one of the most famous investors ever…
3 Signs That Support Our Bullish 2017 Gold Price Prediction
The first sign is gold surpassing its 50-day and 200-day moving averages, which are noted by the blue and red lines, respectively…
The metal has surged higher, setting a new high by surpassing the $1,220 level at the end of the previous week.
The 200-day moving average is getting awfully close and clearly looks like the next target. However, I would not be surprised to see the gold price action cool off first and perhaps even come back down to test the $1,220 level.
The second indicator on the sentiment side is more evidence that gold bottomed back in late December. The World Gold Council just reported that total holdings in gold ETFs were 2,157 tons in late January. That was up 14.9 tons from December. January’s total holdings were worth $84.1 billion, which was a 7% increase from December.
But the third and most important gold price indicator is news that famed investor Stanley Druckenmiller has re-entered the gold market.
Just before Trump won the election in November, Druckenmiller sold off most of his gold holdings. Though he had great timing – gold fell 13.5% between early November and late December – Druckenmiller showed his prowess with a repeat performance.
He told Bloomberg that he started buying gold once again in late December and January. His reasons for buying gold again were nearly every nation trying to cheapen its currency, increased uncertainty around Trump, and gold simply becoming a good value again.
Of course, I’ve been telling you the very same thing. Although we might see a small pause, I expect gold to climb 13.3% to $1,400 later this year.
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