The dollar-dominated yellow metal is on its way to represent another bearish year like this one. Gold costs hiked earlier 2015 with an estimate of US$ 1,305 as safe haven flows enhanced the metal after when Swiss National Bank (SNB) unpegged Swiss franc versus Euro. Gold cost dropped off due to several reasons amid which ones are The Federal Reserve’s recent projection to lift rates, geopolitical events in the past years which liberated it as a whole single entity, the monetary policy aimed to less complicate interest rates at record lows for major central banks, and moreover, a drop down in Energy cost range had put in a lot of negative impact on Gold.
While Gold costs drew support from a big rise in assets of the top gold exchange-traded fund (ETF) late last week, continuation of outflows this week indicated investors remained cautious.
“We see overall bearish gold and look for further downside towards our initial targets in the [$1,033-$1,043 an ounce] area, a move below the 1000 psychological level would point lower towards greater targets near 946,” – Barclays, led by research analyst Feifei Li
Goldman Sachs, JP Morgan, Citi, ABN Amro, and Societe Generale all forecast gold prices to be collapsing below US$ 1,000 in earlier 2016. Even HSBC, which predicts the price will end 2016 higher than it is now, is forecasting the royal yellow metal to be bearish before the rates could retrieve.
“The jump in gold-ETF demand is impressive after the string of losses over the past couple of years, but the market will likely need to see further accumulation for the rally to be extended. A major stumbling block for a further gold rally is oil, and COMMODITY PRICES in general.” – HSBC analyst James Steel.
XAU/USD is bearish with 9% from year 2014, and while there are some bright spots in the horizon, 2016 is looking like another challenging year for the metal.