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Goldman Sachs Group Inc.?says it’s time for you to bet against gold as bullion’s rally to the highest each year isn’t justified,?backing the bearish call?having a comment from a former U.S. leader in a are convinced that was issued, appropriately enough, on Presidents’ Day.
Gold will slump to US$1,100 an ounce in 3 months and US$1,000 an ounce in Twelve months, analysts including Jeffrey Currie and Max Layton wrote in the report?that was dated Feb. 15 and received . It had been headlined with a remark from former U.S. president Franklin D. Roosevelt.
There’s “nothing to fear but fear itself,” the analysts entitled the seven-page note, channeling comments from Roosevelt’s 1933 inauguration once the U.S. economy had been ravaged by the Great Depression. “It’s time for you to sell the fear barometer,” the financial institution said, and recommended shorting gold.
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Gold jumped to the highest since February 2015 last week as sinking equity markets, weaker oil prices, and diminished bets for higher U.S. borrowing costs spurred haven demand. Prices were further boosted by the spread of negative rates of interest and concerns about a crisis in Europe’s banks. Goldman said hello still expected rates to increase, putting the chances of U.S. recession just 15-20 per cent, and rejected the concept a rerun of the crisis was likely.
“We believe that these new fears, like past fears, aren’t justified,” the analysts wrote within the e-mailed report, which didn’t cite the president’s name alongside the headline. “Systemic risks stemming from the collapse in oil and commodity costs are extremely small.”
Gold for immediate delivery rose 0.4 percent to US$1,214.30 an oz by 12:30 p.m. in London. It reached US$1,263.48 on Feb. 11. Goldman’s targets for bullion overlap with those given by the financial institution inside a note last week, if this said that U.S. rates of interest will still increase.
Bloomberg News
