Gold likely to average $1,320 an ounce in Q4

UNITED STATES October 05 2016 1:37 PM

NEW YORK (Scrap Register): Citi Research analysts remain skeptical of a gold-market rally into year-end, reiterating their call for the precious metal to average $1,320 an ounce in the fourth quarter.

Looking ahead, Citi Research believes several structural price drivers appear challenged. Stable mine supply coupled with subdued Asian retail demand cap price expectations. Investment demand has been the clear outlier to this trend as ETF (exchange-traded-fund) holdings curbed three years of net disinvestment; however, inflows appear to be stalling.

Citi Research expects full-year ETF inflows of around 650 tons but also notes most occurred earlier in the year, with September inflows of 11 tons down from the year-to-date average of 80. The U.S. dollar could make or break gold sentiment.