Citi Looks For Short-Term Gold Strength, Then Dip Under $1,200
By GCRU Gold News on Wednesday, March 9 2016, 23:21 - Permalink
Citi Research looks for gold to remain strong for a while before dipping back below $1,200 ounce later in the year, under its “base-case” scenario.
However, in a research report Tuesday, the firm also outlined how the yellow might perform in bullish- and bearish-case scenarios, depending on how global macroeconomic readings and other markets fare.
The bank’s base case, for which it gives a 60% probability, points to gold prices holding current levels into the second quarter as lingering risk aversion supports ongoing gold inflows. Then, better risk appetite in other asset classes, particularly oil, during the second half of the year may send prices back below $1,200.
“Our bull case 30% weighting looks to a further exacerbation of somewhat elevated U.S. and global growth concerns, perhaps even a global recession, which sends prices above $1,400/oz in 2H,” Citi said. “Our bear case, argues for sub-$1,000 prices in early 2017, though only a remote 10% possibility in our analysis, is based on an outsized rebound in equities, a stronger U.S. dollar/more hawkish Fed and much higher oil prices.”
Citi Looks For Short-Term Gold Strength, Then Dip Under $1,200