Gold Bear Turns Bullish; Ups Year-End Forecast by $150

(Kitco News) - Gold’s start-of-the-year rally wasn’t enough to change one gold bear’s mind. However, given the market uncertainty following the Brexit vote and the higher likelihood of delayed Fed hikes, Barnabas Gan has finally upped his forecast.

“Our bearish call for gold has long been anchored on the rate hikes by the Federal Reserve,” the OCBC’s commodity economist and once deemed most accurate precious-metals forecaster, said in a report Thursday. But, “noting that the Fed chairwoman Janet Yellen is a known dove, and her reference to the global economic health (China’s slowdown, Brexit, low oil prices) in her recent speeches leaves us to question if there indeed is going to be a rate hike this year.”

Taking this all into consideration, Gan said he has increased his year-end gold forecast by about $150.

“Despite a rate hike by the Fed, should it come to pass, the risk-off sentiment from the suspense should dominate and lift gold to its $1,350/oz handle easily into the year ahead,” he said. “Should Yellen fail to hike, gold prices would see further upside risk into the $1,400/oz region.”

Gan had previously been calling for gold to end the year at around $1,200 an ounce.

Gold futures were slightly lower Thursday after posting nearly two-year highs in the aftermath of last week’s surprise UK vote. August Comex gold futures were last down $5.40 at $1,321.60 an ounce.

Courtesy: Kitco News