Gold to average $1,150 an ounce in Q4 2016: Citi

UNITED STATES April 18 2016 11:05 PM     

NEW YORK (Scrap Register): Citi Research looks for gold to  remain underpinned in the current quarter but cautions that strength could abate  later in the year.

Citi believes current price momentum may begin to ease after this  quarter, averaging $1,200 an ounce for the year as a whole.

Citi lists a  60% probability of its base-case scenario, which would be gold holding current  levels and maintaining a bid “as lingering risk aversion supports ongoing gold  inflows in the second quarter, perhaps countered by better risk appetite in  other asset classes, particularly oil and equities in the second half of the  year.”

Under its base scenario, Cit sees gold averaging $1,250 this  quarter, $1,210 in the third quarter and $1,150 in the fourth quarter.  

The bank lists a 30% probability of a bull-case scenario, which would be  exacerbation of U.S. and global growth concerns and a softer dollar, along with  a possible oil-supply disruption, that could send prices above $1,400.  

Analysts see only a 10% likelihood of a bear-case scenario with an  “outsized rebound in equities, a stronger U.S. dollar/more hawkish Fed and  significantly higher oil prices into 2017.”