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Saxo Bank remains bullish on Gold during Q3
Jul 12,2017 09:58CST
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In its Q3 outlook, Danish Saxo Bank maintained a bullish outlook for gold, adding that the U.S. Federal Reserve might be too optimistic on rate hikes.

UNITED STATES July 11 2017 2:32 PM

NEW YORK (Scrap Register): In its Q3 outlook, Danish Saxo Bank maintained a bullish outlook for gold, adding that the U.S. Federal Reserve might be too optimistic on rate hikes, while the stock market could face a long-overdue correction.
“We maintain a bullish outlook for gold in the belief that the risk to the US economy is currently skewed to the downside,” said Ole Hansen, head of commodity strategy at Saxo Bank. “This has the potential of leaving the US Federal Open Market Committee too optimistic on rate hikes, something the bond market is already signaling through a flatter yield curve as longer-dated bonds remain in demand.”
Saxo Bank’s positive outlook comes as gold is bouncing off a four-month low with August gold futures last trading at $1,212.20 an ounce, up 0.21% on the day. 
Gold demand will remain supported amid geopolitical risks as well as rising concerns over U.S. President Donald Trump’s ability to carry out his promised growth-friendly reforms, Hansen said in the Q3 report titled ‘Tapping the Brakes’.
In order for gold prices to breach the key $1,300 level, traders will need to see additional stock market weakness, he said.
“A long-overdue stock market correction could be the missing link that gold needs to break resistance at $1,300/oz. The sector will receive increased scrutiny, not least following comments about ‘rich’ asset prices made by the Fed chair at the recent ECB Forum on central banking,” according to Hansen.
Saxo Bank added that it is maintaining its $1,325 level as the end-of-year forecast, with the risk on the upside. “A break above $1,300/oz is likely to attract renewed interest from momentum and macro funds,” the outlook said.

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