Tags: Credit Suisse | Kendall | gold | 1000

Credit Suisse's Kendall: Gold May Drop to $1,000 This Year

By    |   Friday, 14 February 2014 07:13 AM

Gold rose to a three-month high this week in reaction to Federal Reserve Chair Janet Yellen's confirmation that the central bank will maintain its accommodative stance and signs of weakening economic growth.

But Tom Kendall, head of precious metals research for Credit Suisse, doesn't see the rally lasting. Stronger U.S. economic growth will knock gold down, he tells CNBC.

April gold futures were trading at $1,317.60 an ounce on the Comex early Friday, up $17.50 from Thursday.

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"I wouldn't be surprised if we see it trade up a little bit above $1,300 in the next couple of sessions, [but] I think the momentum that we're seeing here is probably looking to exhaust itself in the not-too-distant future," Kendall notes.

Gold buying so far this year has consisted more of short covering than establishing fresh long positions, he adds.

Gold may hit $1,000 by year-end, a drop of 24 percent from Thursday's settlement, Kendall predicts.

"Now that's going to take well into the second half of the year, perhaps right toward the back end of the fourth quarter, . . . once we get through this soft patch in the U.S. economy and we see real interest rates tick back up."

But others are more bullish on the precious metal.

"The sentiment seems to be changing gradually, and gold is attracting bids," Michael Gayed, chief investment strategist at Pension Partners, tells Bloomberg.

"Money printing will continue to help gold. I would say that some people are returning to gold, and some are buying on technical levels."

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Gold rose to a three-month high this week in reaction to Federal Reserve Chair Janet Yellen's confirmation that the central bank will maintain its accommodative stance and signs of weakening economic growth.
Credit Suisse,Kendall,gold,1000
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2014-13-14
Friday, 14 February 2014 07:13 AM
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