While equities consolidate with investors shifting back out of conservative assets, precious metals have held up well year-to-date - gold up almost 17%, silver gained 7%, platinum rebounded 4%.
The near term trend of gold remains unclear as it is related to changing trends in the global equity markets, according to Allocated Bullion Solutions(ABS).
“We remain cautious of making any near-term projections for the price of gold as further gains in the stock markets could induce further downward pressure, while views around the Federal Reserve’s rate hike cycle and USD strength continue to deteriorate,” ABS said in its latest forecast.
ABS stated that sentiment towards U.S. growth prospects have become too pessimistic. “And while we acknowledge recent developments and have revised our rate hike expectation, we continue to look for two 25bp hikes in 2016. Meanwhile, we note that intensifying stress in the global banking system has emerged as another potential trigger for a surge in safe-haven demand.”
Reference: Commodity Online
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