Wednesday, 26 June 2013

Lowers Gold Forecast Through 2014 as Selloff Accelerates - (Otmane El Rhazi)

Goldman Sachs Group Inc. cut its forecasts for gold through 2014 after selling quickened as investors priced in expectations of reduced asset purchases by the U.S. Federal Reserve.
The bank cut its target for the end of this year to $1,300 an ounce from $1,435 and lowered its prediction to $1,050 from $1,270 for the end of 2014. Investors are assuming an earlier tapering of quantitative easing and a Fed fund rate increase sooner than the bank’s economists expect, analysts Damien Courvalin and Jeffrey Currie wrote in a report dated yesterday.
Gold has fallen 23 percent this year, heading for the biggest annual drop since 1981, as speculation increased that the Fed would pare monetary stimulus that helped the metal cap a 12-year bull run last year. Prices slumped to the lowest since September 2010 last week after Fed Chairman Ben S. Bernanke said the central bank may slow its bond-buying program if the U.S. economy continues to improve.
“The momentum in gold prices leaves risk to current prices as skewed to the downside,” the analysts wrote. “Medium term, we expect that gold prices will decline further given our U.S. economists’ forecast for improving economic activity and a less accommodative monetary policy stance.”
Gold for August delivery on the Comex in New York slid 0.7 percent to $1,282.60 an ounce as of 1:41 p.m. in Singapore after tumbling to $1,268.70 on June 21, the least expensive since Sept. 16, 2010. Investors sold 533.3 metric tons from bullion-backed exchange-traded products this year, wiping out more than $54 billion from the value of the funds.

The target would be 1,000$ so some stops should be around 1,100$. Trade accordingly. Otmane El Rhazi

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