By David Cottle
This is a bold call, but the bank thinks it'll take a black swan to move the price of gold up much from here.
You’d be as likely to find a gold bear as a real bear in most financial centres these days.
The oldest haven’s price is up over 25% this year. And, with central banks in the UK and Australia both slashing rates this week, its support looks solid. Low rates mean low yields. And low yields burnish the attractions of non-yielding gold.
Many banks have upped their gold price forecasts. Famed investment gurus have said they like the metal, including the odd former skeptic.
Citigroup’s chief economist Willem Buiter is the man who thinks gold is in a “6,000 year bubble”. However, in a recent interview with Epoch Times, he was far less hostile. Indeed, he said he would even own the metal, as part of a diversified portfolio of currencies.
Not everyone is a gold bull
And alright. We haven’t found an outright bear. But we have found someone who’s not swilling the Kool Aid quite has hard as most. Analysts from at least one bank think the metal’s 2016 rally may be coming to an end.
“While we believe the rally has been completely justified, it was largely driven by just two forms of investor demand and we struggle to see how it goes significantly north of recent highs,” wrote Christopher Louney, commodity strategist for RBC Capital Markets, in a recent report.
“We take the seemingly unpopular view, and contend that gold has already seen its 2016 peak,” he went on.
RBC analysts are reportedly forecasting an average annual gold price of $1,258 an ounce this year and $1,241 an ounce in 2017.
“Can an endless investor bid drive gold materially north of recent highs of around $1,365/oz?” he questioned.