Gold wobbles ahead of Fed; Barclays cuts forecast
Madrid-Spain (Sept 17) Gold prices were struggling to maintain a three-session win streak on Wednesday, as investors waited to hear what Federal Reserve chief Janet Yellen has to say later in the day and Barclays cut its forecast for the precious metal.
Gold for December delivery GCZ4, -0.07% dipped 50 cents to $1,236.20 an ounce. September silver SIU4, +0.64% eased 7 cents to $18.65 an ounce.
A day earlier, gold managed to knock out an advance even as concerns continued to mount that the dollar would strengthen after the upcoming Fed announcement on the fate of its bond-buying program.
As for the vote on Scotland’s independence, Edward Meir of INTL FCStone fully expects the “no” vote to win, but look out if it doesn’t.
“We do expect to see a massive short-covering rally in gold if Scotland votes ‘yes’, an event that should be momentous in terms of the economic fallout on both the U.K. and Europe,” Meir said.
A bear view on gold came from analysts at Barclays, who said they see an “increasingly bearish macro backdrop developing” for the metal.
“Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year,” said a team led by Suki Cooper.
With that, Barclays cut its fourth-quarter 2014 quarterly average forecast for gold to $1,220 an ounce and its average 2014 price to $1,270 an ounce. For 2015, the analysts see price risk skewed to the downside, with average prices set to reach only $1,180 an ounce. Their silver forecast for 2015 remains unchanged at $17 an ounce, amid expectations for further downside pressure.
In contrast, Cooper and her team said the “sizeable deficits” forecast for platinum and palladium will likely overpower any downside risk stemming from weaker gold prices and a stronger dollar, supporting prices over the long term. They have revised up their 2014 and 2015 price forecasts for palladium to $816 an ounce and $890 an ounce respectively. Platinum prices forecasts have been brought down to $1,424 an ounce and $1,451 an ounce respectively, as plentiful above-ground stocks should cap upward momentum.
Elsewhere in metals trading, December palladium PAZ4, -0.26% rose 90 cents to $845.20 an ounce, while October platinum PLV4, -0.22% nudged up 30 cents to $1,367.60 an ounce. High-grade copper for December delivery HGZ4, -0.88% lost 2 cents to $3.14 a pound.
Source: MarketWatch
