Gold News

Gold Prices Retreat from 1-Week, 2015 Forecasts Cut Even as Money Managers Fear 'Over-Valued' Bonds & Stocks

GOLD PRICES approached 1-week highs above $1209 per ounce lunchtime Thursday in London, before edging back as the US currency rallied on the FX market and European equities cut earlier losses from new multi-year highs.
 
A net 25% of professional investors polled by Bank of America-Merrill Lynch think  global stock markets are now over-valued, a report said this week, up from 23% in March and just 8% in February.
 
Bond prices worry professional money managers even more, the BAML study says, with a net 84% now thinking that fixed-income markets are over-valued.
 
But in the gold bullion market, a poll of 38 analysts and traders by Thomson Reuters finds the average 2015 gold price forecast being cut – down from $1234 per ounce in January to $1209. 
 
"Gold prices are bouncing around the $1200 per ounce level," says a note from Dutch bank ABN Amro, "putting both bulls and bears on their wrong foot all the time."
 
Closing at a discount to China's main domestic wholesale gold contract, Shanghai's free-trade zone gold ended Thursday just 16 cents above comparable London quotes per ounce.
 
The iSGE's key offshore contract also saw lower turnover than the main domestic Au(T+D) contract for the fourth session running since suddenly overtaking it last week.
 
"Gold continued to push higher during early Asian trade today," says a trading note from Swiss refining and finance group MKS, "before succumbing to selling pressure as the Shanghai on-shore premium moved [up] towards $2.50."
 
Shanghai's stock market jumped 2.7% to new 7-year highs Thursday despite a warning from Chinese premier Li Keqiang that the current 7% rate of GDP growth – the slowest since the global financial crisis – "won't be easy to achieve" again this year.
 
Northern Eurozone bond yields meantime fell to fresh record lows as prices rose further following yesterday's commitment to €1.2 trillion of QE purchases by the European Central Bank.
 
"We still think German 10-year yields will be around zero" at year end, says ICBC Standard Bank strategist Steven Barrow – "considerably below the consensus."
 
Over in world No.2 gold consumer nation India – where the spring festival of Akshaya Tritiya has been promoted as an 'auspicious' time to buy gold for over a decade – the market "is now saturated with importing banks and supply" says the Platts news service, quoting a bank trader.
 
"The wedding season is nearly over, and then we are heading into the slow months of June/July," another broker says.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

scri

Market Fundamentals