We expect a combination of looser monetary policy in the euro-zone, the UK and Japan and building inflationary pressures in the US to boost the prices of gold and silver over the next year or so. Admittedly, prices could drop back in the short term if the Fed resumes its rate hikes sooner than the markets currently anticipate. However, any pull-backs are likely to be temporary, particularly with the US Presidential election coming up and the potential contagion of Brexit to the rest of the EU. We have therefore revised up our end-2016 and end-2017 forecasts for gold and silver.
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