Monday, September 23rd 07:20 PM IST

Is the rally in Gold and Silver short lived?

# gold  # silver market  # production  # jewellery  # demand  # supplies  

Morgan Stanley expects 2014 gold prices to average $1200-1300 while US Fed is delaying the inevitable when it comes to tapering and once it is announced, gold and silver prices can only move southward. Gold could drop to $1000 in the near term, the bank said.

Image Courtesy of BigStockPhoto.com

LONDON/WASHINGTON/MUMBAI(Bullion Street): Gold prices rallied 4% the day Ben Bernanke said US will continue its stimulus measures however, many analysts expect the uptick in gold and silver to be temporary and expect prices to see a sharp slump very soon.

Citi Group expects Gold to average $1250 while exchange traded funds may see inflows it could still be temporary. Indian market is not expected to fare well in the traditionally strong seasonal period between September to December as the government hiked import taxes to 10% and put in place a number of measures to curb investments in precious metals.

Citi Group sees increased investor interest in Silver not sufficient to overcome weak supply-demand fundamentals. Prices could drop from $21.45 an ounce in third quarter to $20.20 an ounce in the fourth quarter of this year.Their call for 2014 is $20.20 an ounce as well, and for 2015, they see an average of $22.20.Silver ETF demand has seen a strong pickup, but again, Citi is not upbeat here. Net implied investment for ETFs needs to equal 184.4 million ounces to bring the market into balance this year. Inflows only equal 33 million year-to-date.

Morgan Stanley expects 2014 gold prices to average $1200-1300 while US Fed is delaying the inevitable when it comes to tapering and once it is announced, gold and silver prices can only move southward. Gold could drop to $1000 in the near term, the bank said.

UBS is netural on gold in the short run bearish on a quarterly and yearly basis.Barclays has visualised a scenario in their gold price model where tapering is delayed for a longer period which could push prices higher to $1482 per ounce.

After reading this article, people also read:

How about a fully featured Android App for your business?

Most Popular

Bullion Street Newsletter