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Tags: Barclays | gold | Fed | 2015

Barclays: Gold Will Average $1,180 in 2015

By    |   Thursday, 18 September 2014 01:49 PM

Gold slumped to an eight-month low Thursday after the Federal Reserve raised its forecast for interest rates next year, and Barclays analysts think it's headed lower still.

December gold futures traded at $1,222.10 an ounce Friday morning on the Comex, down $4.80 from Thursday. Earlier they hit a low of $1,216.30.

Barclays thinks interest rates and the dollar will put gold under pressure.

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"Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year," said Barclays precious metals analyst Suki Cooper, according to MarketWatch.

Barclays predicts that gold will average $1,220 this quarter, $1,270 for 2014 as a whole and $1,180 for 2015.

As for interest rates, Fed policymakers Wednesday increased their median estimate for the federal funds rate to 1.375 percent at the end of 2015 from 1.125 percent in June.

The Fed has kept its fed funds target at a record low of zero to 0.25 percent since December 2008.

Higher rates hurt gold by keeping inflation under control, and the precious metal often moves in the opposite direction of the dollar.

"There is no interest in gold at a time when it's clear that rates are going to start rising," Tommy Capalbo, a broker at Newedge Group, told Bloomberg. "The economy is growing, and people don’t need a safe haven."

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Finance
Gold slumped to an eight-month low Thursday after the Federal Reserve raised its forecast for interest rates next year, and Barclays analysts think it's headed lower still.
Barclays, gold, Fed, 2015
246
2014-49-18
Thursday, 18 September 2014 01:49 PM
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