Gold euphoria unlikely to last
But some market players say geopolitical concerns will support prices and may give the yellow metal a short-term boost, report DEBARATI ROY, NICHOLAS LARKIN and GLENYS SIM
Add BT as a preferred source[NEW YORK] AFTER the biggest gold slump in three decades left investors heartbroken, they're following Taylor Swift's advice and never, ever getting back together. Janet Yellen, the one person able to make the lovers reconcile, did her best. Prices have surged the most since September the day after the Federal Reserve chair signalled last week that low interest rates are here to stay.
Traders and analysts surveyed by Bloomberg News aren't expecting the euphoria to last. Volatility in futures is near a four-year low, at a time when trading volumes and open interest in Comex contracts are waning.
Prices will average US$1,250 an ounce next quarter, about 5 per cent less than now, according to the median of 15 estimates. The analysts were surveyed before and after the Fed's June 18 outlook, and the forecast was unchanged. Even after a 28 per cent plunge in 2013, the bears are emboldened by this year's records in equity markets, and gold assets in exchange-traded products (ETPs) have shrunk to the smallest since 2009.
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