UNITED STATES March 09 2016 10:38 AM
NEW YORK (Scrap Register): Goldman Sachs is maintaining a bearish view on gold, reiterating its outlook in a report saying that a recent surge in commodity prices generally is not sustainable.
Goldman concedes its short gold recommendation, which it opened in line with its $1,000-per ounce 12-month forecast, is currently at a loss.
Still, Goldman said, “This gold rally was driven by a lack of conviction in divergence in U.S. growth as a weak U.S. dollar has been highly correlated with a higher gold price.”
Goldman believes this realignment view of weak global growth is not supported by the U.S. data, which will likely reinforce higher U.S. yields, a stronger U.S. dollar and the return of divergence, particularly should strong U.S. consumer growth dissolve market fears regarding U.S. growth. This in turn will likely put downward pressure on gold prices towards their near-term target of $1,100 an ounce (current price is $1,265 an ounce ).”ac