FXE: Precious Metals Fundamental Analysis – July 1, 2015 – Forecast – Gold, Silver & Platinum
Gold eased almost $7.00 as traders were less stressed over the EU situation. Silver dipped 50 points to reach 165.645 while Platinum was flat at 1083.20. Optimism that Greece and its creditors would reach a deal, which hurt bullion prices last week, vanished after midnight on Friday as Prime Minister Alexis Tsipras surprised counterparts by calling for a July 5 referendum on austerity measures demanded by creditors. Tuesday marks the expiry of Greece’s bailout package as well as the deadline for a payment to the International Monetary Fund. Gold’s advance came as the euro sank against the dollar and global equities retreated. On Monday gold saw a bit of activity but Tuesday showed that markets were calm and unconcerned letting gold ease back down.
Deutsche Bank in its latest forecast has kept the price outlook for Gold unchanged at $1,125 for the fourth quarter of the year. DB said the medium term outlook for Gold is bearish.
“This is based on our expectation of Fed tightening and the associated upside risks to US real yields and the US dollar. We would only start to amend this view if the Fed delayed monetary tightening into next year and/or US growth started to lose momentum with the consequent negative implications for the S&P500 and the US dollar,” DB said.
Like the US dollar and the S&P500, gold prices have been relatively stable during the second quarter. As a result, the gold market has exhibited relative calm to the back-up in US real interest rates and the escalation in financial risk surrounding Greece.
According to flow data, there is no evidence to suggest that the investor community has been positioning for a Greek default or, in the extreme, Grexit. Indeed CFTC figures reveal net speculative length in gold over the past month has fallen by 30% while gold ETF holdings in volume terms have declined by 5% or 93 tonnes since their February 2015 peak.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
