ECONOMIST’S EDGE: Gold Market Dynamics Shifting Gears

Gold may see some extra volatility in 2017 as several driving forces are converging. Gold bears no interest, so in a rising rates environment its value may be challenged. Improved risk management and technological enhancements may also play a role in the continued expansion of production, even if prices fall. Central banks have been buying gold for the last few years, but will they continue? China appears to be decelerating further, and it has been a big buyer of gold. Taking each of these factors into consideration, this could be quite a volatile year for the shiny metal.