Gold Price Forecast For July

London (July 9)  Top gold forecaster BNP Paribas, warns the market of a clear and present danger, the US Federal Reserve. Their analyst warns of an increasing cost of holding gold, (which is not interest bearing), at a time of rising interest rates. Their head of commodity markets strategy is among the most bearish of analysts, and expects bullion to drop to $1,165.00/oz in the fourth quarter:

For top gold forecaster BNP Paribas, bullion bulls are up against a clear and present danger — the US Federal Reserve.

The central bank’s plan to raise interest rates again this year, while potentially reducing its balance sheet, is negative for the non-interest bearing asset, says Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas in London, which topped Bloomberg’s gold accuracy rankings in the second quarter. He’s among the most bearish forecasters, betting bullion will drop to $1,165 an ounce in the fourth quarter, from $1,225 on Thursday.

The Rising Cost of Holding A Future, Option or CFD Contract

The danger Harry Tchilinguirian refers to, isn't just the Feds intention to normalize interest rates and gradually reduce bond investing, by selling off assets it's gradually acquired since the 'Great Recession':

At the same time, central banks are signaling higher borrowing costs, prompting hedge funds and other large speculators to reduce long positions in US bullion futures, and options to the lowest since May.

From the 1st July a charge or 'carrying cost' is being introduced which increases the cost of holding 'futures', options and expiring CFD's over night. It isn't a significant amount in itself, but could still fuel negativity.

Source: SeekingAlpha