Thursday, September 18, 2014

Realizing That Gold Is down $70 Thus Far In September, Barclays Cuts Forecast

"Il faut bien que je les suive, puisque je suis leur chef."*
Phrase historique prononcée à Paris - 1848

$1221.90 last, down 14 bucks.
From MarketWatch:
Gold loses luster on Fed; Barclays cuts forecast
Gold prices dipped Wednesday on concerns about a stronger dollar ahead of the Federal Reserve policy statement and in response to Barclays lowering its gold forecast.

But the precious metal may get a reprieve in the short term as the Fed’s statement, released after gold settled, reiterated that the central bank will keep interest rates low for a “considerable time” after it curtails its bond buying program.

Gold for December delivery GCZ4, -1.20%  ticked down 80 cents, settling at $1,236.70 an ounce.
As for the vote on Scotland’s independence, Edward Meir of INTL FCStone expects the “no” vote to prevail, but said markets could get dicey 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.
Barclays bearish view on gold is linked to rising rates and the dollars strength. “Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year,” said Barclays’ analyst 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.
*Schoolboy translation: "I must follow them for I am their leader."