Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Gold's plunge could quickly reverse: analyst

Gold's plunge could quickly reverse: analyst

Gold’s largest plunge in 14 months may soon reverse according to gold’s top forecaster in Q3 according to Bloomberg:

Looming risks from the U.S. presidential election in November to Britain starting talks to leave the European Union next year may boost its role as a haven, said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore. Increasing shale oil output in the U.S. is also likely to cool the surge in crude prices, curbing inflation, he said.

“As quickly as gold fell, as quickly gold could rally back,” Gan said in a report received Wednesday. “Weak inflationary pressures may once again lift gold prices back to their previous shine.” He was the most accurate forecaster of the metal in the third quarter, according to Bloomberg data.

Bullion slumped Tuesday on speculation that the period of easy monetary policy is ending. The European Central Bank was said to be building an informal consensus to wind down bond purchases gradually, while Federal Reserve officials called this week for higher U.S. borrowing costs amid signs of an improving economy. Oil prices have also been rising, stoking inflation worries and boosting the odds of a rate hike.

Little evidence has emerged of investors cutting holdings in exchange-traded funds. Assets climbed 3.1 metric tons to 2,036.5 tons Tuesday to hold near the highest level since 2013, data compiled by Bloomberg show.

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