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wind00on Jul 20, 2015 11:52am
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Gold To Recover When Higher U.S. Rates Factored Into Prices
Gold To Recover When Higher U.S. Rates Factored Into Prices
Gold To Recover When Higher U.S. Rates Factored Into Prices - Capital Economics
By Kitco News
Monday July 20, 2015 11:41
Capital Economics says sentiment toward gold is now “excessively negative” and sees potential for the yellow metal to recover once higher U.S. interest rates are priced into markets. Gold has been hurt by strength in the U.S. dollar, plus failed to benefit much from safe-haven demand during the most recent Greek debt crisis and Chinese equity crash, Capital Economics says. “Admittedly, it is hard to be bullish on the prices of gold and silver until markets have time to digest the first Fed rate hike,” Capital Economics says. “However, it would be wrong to conclude that the medium-term outlook for gold depends solely on the evolution of U.S. monetary policy, and that Fed tightening can only mean lower prices. And while sentiment is currently negative, this at least means that investor holdings of gold are relatively low. Overall, while some further weakness seems likely ahead of the first U.S. rate hike, we expect prices to recover to $1,200 per ounce for gold and $16.50 for silver by end-2015. We are keeping our 2016 price forecasts broadly unchanged at $1,400 for gold and $20 for silver.”
By Allen Sykora of Kitco News; asykora@kitco.com