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Gold correction may be mostly done: Deutsche Bank

MarketWatch
0 Comments| July 8, 2013

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By Barbara Kollmeyer 

MADRID (MarketWatch) -- Strategists at Deutsche Bank said much of gold's correction may have already happened, in a note on Monday. Gold has come down over 30% from a peak of around $1,900 an ounce in September 2011. "Lessons from history suggest that although gold-price losses have been extreme, the extent of the price correction today is still some way short of the percentage declines that occurred in 1980-1," said Michael Lewis and other strategists in a note. "However, we would classify events over 30 years as significantly different since at that time, U.S. short-term interest rates rose to 20% with real interest rates also rising rapidly." While they still see Fed policy as a strong headwind to gold returns, "it is possible that the major part of the gold price correction has already occurred," he said. Gold for August delivery rose $15.90, or 1.3%, to $1,228.40 an ounce on Monday. 

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