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Citi sees lower gold prices coming...
https://www.kitco.com/news/2015-08-18/Citi-Looks-For-Gold-Prices-To-Average-1-090-1-050-In-Third-Fourth-Quarters.html

Citi Looks For Gold Prices To Average $1,090, $1,050 In Third, Fourth Quarters

By Allen Sykora of Kitco News
Tuesday August 18, 2015 08:37

(Kitco News) - Citi Research sees gold averaging $1,090 an ounce in the third quarter and $1,050 in the fourth, calling for weakness due to macroeconomic conditions.

After moving lower for most of the third quarter so far, the metal bounced last week when China devalued its currency, prompting safe-haven buying and short covering. However, Citi said, it looks for the Federal Open Market Committee to “look past international developments” and still tighten interest rates as early as September.

Higher rates tend to hurt gold by supporting the U.S. dollar and also raise the so-called opportunity cost.

“Certainly conventional wisdom dictates that Fed tightening should be negative for bullion, though history does not always confirm this when considering gold’s performance during previous Fed tightening cycles,” Citi said.

The bank lowered its overall annual average gold-price forecast this year to $1,140 an ounce and trimmed its 2016 outlook to $1,050.

Silver is seen averaging $14.90 and $14.60 this quarter and next. The full-year and 2016 forecasts are $15.70 and $14.50, respectively.

Citi commented that safe-haven buying was “notably absent” for much of the second and third quarters despite a steep sell-off in Chinese equities and a renewal of the Greek credit crisis.

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