Gold to average $1,100 an ounce in the first quarter of 2016

UNITED STATES January 20 2016 10:35 AM    

NEW YORK (Scrap Register):  Analysts at BMO Capital Markets expect gold prices to average $1,100 an  ounce in the first quarter and $1,050 for the year.

Gold prices managed  to have a good start to the year on safe-haven demand, but analysts at BMO said  that they don’t expect much action in the market.

“Prices are to be  range-bound near term on conflicting factors – potential for USD strength on the  downside, safe-haven demand for the upside,” said BMO analysts in a research  note.

BMO believes chatter of the next Fed rate hike will return in full  force over the next couple of months, which is negative for gold and silver.”  

However, they note that once the Fed hikes rates again, it will have  less of an impact on the price of gold. “U.S. election year will be another test  for gold prices,” they added.