Gold price set for biggest weekly jump in 20 months on haven demand
The precious metal has surged around 30% so far this year, supported by healthy central bank buying.
Gold is doomed. That’s the message we are clearly getting these days from several analysts who predict prices for the metal have, at least, another 30% to fall by the end of 2015.
According to the latest Bloomberg survey of analysts and traders, bullion prices will hit $984 — the lowest price for the precious metal since 2009 — before the year-end.
“Speculators are shorting the metal for the first time since US government data began in 2006, and holders of exchange-traded products are selling at the fastest pace in two years”, according to the report.
Analysts from Deutsche Bank predict a much greater decline than that.
“Gold would need to fall towards $750/oz to bring prices in real terms back towards long-run historical averages,” they said Tuesday.
Prices for the precious metal have hit five-year lows on expectations that the US Fed was going to hike interest rates for the first time in almost 10 years. As gold doesn’t pay income it benefited from the historic period of near-zero interest rates. Betting Fed officials were in favour of an increase, many decided to unload their gold holdings.
August gold was down $6.30, or 0.6%, at $1,089.90 an ounce in late morning trading the New York Comex after trading as high as $1,098.50 earlier. Prices were set to mark their sixth straight settlement under $1,100.
However the Federal Reserve on Wednesday both declined to rate interest rates and provide any clues about when a hike is on the way.
Comments
kef long
… lets hope that banker’s pay also moves towards historical averages.