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(Kitco News) – With Q4 in full swing and gold prices struggling to breach $1,300 an ounce, one bank analyst says he isn’t so hot on the yellow metal – at least over the short term.
“Overall, for the rest of 2017 we are not bullish on prices, especially with a rate hike still expected this year,” Christopher Louney, commodity strategist for RBC Capital Markets, said in a research note Thursday.
Gold prices have fallen under pressure as expectations of further tightening by the Federal Reserve have boosted the U.S. dollar. The metal trades inversely to the greenback so any strength in the U.S. currency hurts gold prices.
And, even if gold has gained some momentum on heightened geopolitical risk, particularly in Europe, Louney thinks it is already baked into the price.
“Gold has gotten a bid from another geopolitical risk in the form of Spain/Catalonia – a situation which continues to unfold and the tension of which is currently priced into the gold market in our view,” he said.
However, Louney is not an outright bear and remains optimistic gold further out. “We are looking more towards 2018 for strength,” he wrote.