Salient to Investors:
Hedge funds et al cut long contracts to the lowest since June 25. EPFR Global said money managers added the most since October 2012 to gold funds last week, while inflows for commodity funds were the most since November 2012. Evestment said assets managed by commodity hedge funds have fallen 5 percent since the end of 2012.
Michael Mullaney at Fiduciary Trust said the Fed factor has been taken off the table for now, which will be bullish for gold.
Goldman Sachs said last week’s Fed decision the debt ceiling debate leaves risks to gold prices as skewed to the upside in the near term, and restated that gold will resume a drop into 2014.
Societe Generale forecasts gold will average $1,225 in Q4 and says the rally is an opportunity to sell.
Jack Ablin at BMO Private Bank said the Fed’s latest move doesn’t change the longer-term picture, and anyone who believes the Fed cannot keep doing this forever should also believe that gold can’t keep running at this pace forever. Ablin said that unless fundamentals catch up, we are due for a pullback in many assets, particularly gold.
Peter Jankovskis at Oakbrook Investments said the market understands the Fed decided not to taper because they are concerned about the US growth, a negative for commodities so we have not yet totally turned the corner.
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