Kitco News: "Gold Has Peaked For 2015 – IG Index"
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Gold Has Peaked For 2015 – IG Index
By Neils Christensen of Kitco News
Tuesday April 21, 2015 9:32 AM
(Kitco News) - The start of the year could have been the peak in gold prices for 2015 as the metal remains range-bound against a strong U.S. dollar and a Federal Reserve that is focused on raising rates sometime in 2015, according to one market strategist.
In an interview with Kitco News, Chris Beauchamp, senior market analyst at IG, said that although he sees some short-term gains in the yellow metal, prices might struggle to break above $1,250 an ounce this year.
“I think $1,250 is a fairly big target on the upside, if we do get a bid higher,” he said. “So I think $1,300 seems like a long way off at the moment.”
In a research note published Monday, Beauchamp said his near-term target is $1,220 an ounce, as technical indicators have turned “cautiously bullish.”
The biggest hurdle gold faces, he said, is that it is no longer seen as the ultimate safe-haven; investors are confident the U.S. economy will continue to strengthen, proving to be an alternative to gold.
Although there are pockets of problems throughout the world, none of them are seen as systemic problems to the global marketplace, he added.
“We look at the problems now and we see that there are other places where you can put your investment capital,” he said.
There has been some hope in the marketplace that the Fed’s first interest rate hike could signal the bottom for gold; however, Beauchamp doesn’t see that scenario.
“The only problem is that when they do raise rates for the first time the conversation will then shift from when to how fast and I think that could make life difficult for gold,” he said.
Although Beauchamp doesn’t see significant upside to gold in 2015, he also doesn’t see any further significant downside either, adding that $1,150 is a key area to watch.
“If you get a substantial selloff to $1,150 and that breaks, then I think we are in a different world for gold,” he said. “But I’m not expecting to see triple digits or even $1,000 by the end of the year.”
With no compelling narrative to own gold, aside from holding small portion in your portfolio as the ultimate insurance policy, he said he is expecting the market to remain rangebound, anticipating “positional warfare.”
“There are reasons to suspect that gold will continue to find a base in and around $1,200 for the time being.”
Beauchamp said that he is expecting to see silver to follow a similar pattern. Although an improving economy should theoretically boost industrial demand for the metal, Beauchamp said that isn’t a story the market right now is “very excited about.”
“You can expect the economic story to gain traction as we go through the year, but for the moment it looks like the silver market hasn’t woken up to it,” he said.
Kitco Link
By Neils Christensen of Kitco News
Tuesday April 21, 2015 9:32 AM
(Kitco News) - The start of the year could have been the peak in gold prices for 2015 as the metal remains range-bound against a strong U.S. dollar and a Federal Reserve that is focused on raising rates sometime in 2015, according to one market strategist.
In an interview with Kitco News, Chris Beauchamp, senior market analyst at IG, said that although he sees some short-term gains in the yellow metal, prices might struggle to break above $1,250 an ounce this year.
“I think $1,250 is a fairly big target on the upside, if we do get a bid higher,” he said. “So I think $1,300 seems like a long way off at the moment.”
In a research note published Monday, Beauchamp said his near-term target is $1,220 an ounce, as technical indicators have turned “cautiously bullish.”
The biggest hurdle gold faces, he said, is that it is no longer seen as the ultimate safe-haven; investors are confident the U.S. economy will continue to strengthen, proving to be an alternative to gold.
Although there are pockets of problems throughout the world, none of them are seen as systemic problems to the global marketplace, he added.
“We look at the problems now and we see that there are other places where you can put your investment capital,” he said.
There has been some hope in the marketplace that the Fed’s first interest rate hike could signal the bottom for gold; however, Beauchamp doesn’t see that scenario.
“The only problem is that when they do raise rates for the first time the conversation will then shift from when to how fast and I think that could make life difficult for gold,” he said.
Although Beauchamp doesn’t see significant upside to gold in 2015, he also doesn’t see any further significant downside either, adding that $1,150 is a key area to watch.
“If you get a substantial selloff to $1,150 and that breaks, then I think we are in a different world for gold,” he said. “But I’m not expecting to see triple digits or even $1,000 by the end of the year.”
With no compelling narrative to own gold, aside from holding small portion in your portfolio as the ultimate insurance policy, he said he is expecting the market to remain rangebound, anticipating “positional warfare.”
“There are reasons to suspect that gold will continue to find a base in and around $1,200 for the time being.”
Beauchamp said that he is expecting to see silver to follow a similar pattern. Although an improving economy should theoretically boost industrial demand for the metal, Beauchamp said that isn’t a story the market right now is “very excited about.”
“You can expect the economic story to gain traction as we go through the year, but for the moment it looks like the silver market hasn’t woken up to it,” he said.
Kitco Link
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Comments
What is interesting, is that Kitco of all places, published this less than positive outlook for PM's.
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
<< <i>Someone should have written something similar 4-5 years ago...or maybe they did.
Their senior analyst did, but Kitco fired him.
He's probably saying "told you so."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey