Although the Fed shifted to a more aggressive tone on monetary policy and the gold market continues to struggle below $ 1,800, many agree that precious metals and the mining sector will continue to be attractive investments next year.
But today's US GDP data will determine the fate of gold before the Christmas holiday.
In their latest monthly report, VanEck strategists Joe Foster and Iamru Casanova said gold continues to be a vital hedge against inflation, even as the Fed appears to take a tougher stance on inflation next year.
They said this after the central bank announced that it would speed up the pace of reducing monthly bond purchases, while also making clear that it could raise interest rates three times next year.
But the two analysts noted that hawkish expectations come with significant risks.
Also, despite the sluggish demand for gold this year, relatively high prices have been a boon for the mining sector and will continue to support precious metals stocks.
VanEck explained that gold stocks are grossly undervalued compared to historical rates, and during the bull market between 2006 and 2011, mining stocks traded 15x their price-to-cash flow (P / CF) ratio.