Gold likely to reclaim $1,300 an ounce by the end of 2018


NEW YORK (Scrap Register): Commerzbank analysts do not feel gold’s weakness has been justified by the fundamental backdrop and look for the metal to reclaim $1,300 an ounce by year end.

“We see no real fundamental reason why the gold price should be having a hard time, given the numerous risks to the economy and financial markets,” they said in a research note.

The possibility of a disorderly ‘Brexit,’ a further escalation of the already acrimonious trade dispute between the U.S. and China, and the problems in the euro zone should really increase demand for gold as a safe haven.

The U.S.-China trade conflict is likely to slow business activity, which in turn argues against significant tightening of interest-rate policy by the Federal Reserve, Commerzbank added.

“What is more, it could also accelerate consumer price inflation, which suggests very low or even negative real interest rates, and thus creates a favorable environment for gold as a means of capital preservation,” Commerzbank noted.

Gold fell for the sixth straight month in September, the longest losing streak since 1997. However, “we believe the tide will soon turn for gold and envisage a potential price of $1,300 per troy ounce by year’s end,” Commerzbank noted.

comments powered by Disqus
Copyright © 2017 ScrapRegister 2017-2022. All rights reserved