Gold 2014 target was cut 12 percent to $1,160 an ounce and the prediction for 2015 reduced 13 percent to $1,138, in a report Morgan Stanley published today. Gold remains under pressure as the global recovery gains traction, increasing the risk of higher interest rates.
Bullion will fall to $1,050 in the next 12 months as the U.S. central bank pares stimulus, Goldman analysts wrote in a Jan. 12 report whereas ABN said Jan. 10 that gold may end 2014 at $1,000 an ounce.
A Reuters poll of 37 analysts conducted in the last month returned an average gold price forecast of $1,235 an ounce for this year, while in 2015 prices are seen rising only marginally, to $1,260 an ounce. Gold last year hit its lowest since August 2010 at $1,180.71 an ounce. That blew away expectations of analysts polled this time last year, who had forecast a modest 6 per cent rise from 2012’s average.
Gold was trading near its lowest in a week on Wednesday, after sharp overnight losses on speculation about further cuts to U.S. stimulus measures and an improving outlook for the global economy. In revisions to its World Economic Outlook report published on Tuesday the IMF said it expects the global economy to grow by 3.7% in 2014, up from an October forecast of 3.6% growth.
Investors are turning away from putting new money into gold as the recovery in the international economy, led by the United States, is boosting stock markets and hurting the metal‘s appeal as a safe-haven investment. Gold started 2014 on a positive note but worries over stimulus cuts, which weighed on prices last year, are catching up.
A London Bullion Market Association survey of traders and analysts shows that gold will average $1,219 an ounce this year and gain as much as 11 percent from now, after posting its biggest annual decline in three decades. The metal will reach $1,379 and trade above $1,067 through December, the mean response of 28 participants shows.
“ETF outflows look set to continue with an unfriendly macroeconomic backdrop of widespread growth, low inflation and lower tail risks,” said Matthew Turner, an analyst at Macquarie Group Ltd. in London, according to the LBMA report. “Continued strong Asian demand, helped by a likely easing of India’s import restrictions later in the year, should help prices recover to average only slightly below today’s level.”
The LBMA winner in gold for both 2012 and 2013, René Hochreiter now sees gold trading in a range of $1050-1250 per ounce – tighter than the 28-analyst consensus of $1067-1379. Overall, says Hochreiter of Johannesberg-based mining finance consultancy Allan Hochreiter Pty Ltd, the 2014 gold price will average $1150, down from last year’s average of $1411.
At the other end of the scale, three analysts said the price could fall as low as $950. One, Robin Bhar of Société Générale in London, said gold investors were “likely to remain big net sellers over the coming months and quarters”.
- Gold Target Cut by Morgan Stanley Seeing ‘More Pain to Come’ – Bloomberg
- Gold Price Forecast by LBMA Contest to Drop 14% in 2014, Worst Low of $950 – Bullion Vault
- Gold falls on IMF forecasts, Fed tapering expectations – Nasdaq
- Gold seen averaging $1,219 in 2014 – Business Report
- Gold near bottom in 2014; nurses biggest loss in 32 years – The Economic Times