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Mixed gold outlook

Citation: Date:2017-5-12 14:58:07

Analysts’ outlooks on the gold price are mixed with Credit Suisse reportedly maintaining its prediction of US$1,400 an ounce by the end of the year, but UBS forecasting a fall.
Credit Suisse has reiterated its mid-April outlook calling for gold prices to appreciate to $1,400/oz by the fourth quarter, according to a global scrap trader.
The bank cited expectations for US real interest rates to surprise to the downside, waning strength in the US dollar, a dovish central bank approach to future monetary policy, continued robust Chinese investment demand, an elevated probability of a disruptive geopolitical event, and positioning in gold that remained neutral and well below levels seen in 2016.
However, a UBS report from Monday anticipated higher commodity prices in the coming months but a fall for bullion, Bloomberg reported.
The UBS report said firmer global economic growth and greater supply discipline should set the stage for higher commodity prices including crude oil, natural gas and copper.
But it expected the gold price to test $1,200/oz or lower over the next three months as investors under-priced the possibility of two additional US rate hikes this year, inflation slowly ascending and political risks fading.
Over the last six months, the spot gold price has climbed from its mid-December low of $1,128.38/oz to a mid-April high of $1,289.76/oz but has fallen to just over $1,222/oz this morning.