"BAML Sees $1,250, $1,300 Gold In Second, Third Quarters"
Monday June 2, 2014 12:36 PM
Bank of America Merrill Lynch lists average gold-price forecasts of $1,250 for the third quarter and $1,300 for the fourth. The metal has recently given back gains from earlier in the year, with the bank commenting that economic activity is seen steadier in the world excluding China, especially in the U.S. However, with Indian elections over, the bank anticipates an appreciation of the rupee partially on accelerating portfolio inflows. “Keeping in mind that the previous administration had curbed gold imports to contain the country's current account deficit, we believe this should incentivize authorities to facilitate an increase of gold shipments in coming weeks and months,” BAML says. “While this may not be sufficient to offset headwinds from the global macro economy, it should give some support to gold, which we believe is unlikely to fall below $1,150/oz as a result.” Meanwhile, the bank lists one potential risk in gold’s favor – if the U.S. and Chinese economies were to underperform. “Should contagion be stronger than we currently factor in and cyclical commodities like the base metals come under pressure, there is scope for a gold price rally,” BAML says. “After a soft first quarter, we also believe that continued weakness in U.S. economic activity may make gold an attractive hedge.”
www.kitco.com/news/2014-06-02/...ewsMarketNuggets-June-02.html