Gold ETP sales to increase, gold prices to fall says SocGen...
GOLD PRICES will end 2013 at $1200 per ounce because of increased sales from exchange-traded products, according to analysis from a major investment and bullion bank.
Societe Generale analysts sees gold ETF and other investment trust-fund sales continuing to the end of the year, leading the price of bullion to drop to $1200 per ounce.
The bank's previous year-end forecast was $1375.
"We believe that the dramatic price drop in mid-April was the beginning of the deflation of a bubble," say Michael Haigh, Jesper Dannesboe, and Robin Bhar, pointing to "speculation [that] the US economic recovery will mean less [monetary] stimulus."
After falling 15% over the last 4 months to 2,100 tonnes – the worst run since the first exchange-traded product was listed in 2003 – global gold ETP
holdings will probably drop 800 tonnes altogether this year, they reckon.
The SocGen commodities team see a further 500 tonnes of exchange-traded gold selling in 2014, and "expect continued ETF selling to exceed higher demand for jewelery/bars and coins."
That's in contrast to HSBC analyst James Steel
, who told Bloomberg last week the rate of gold ETF liquidation is already slowing down.
Fellow bullion dealers Standard Bank noted Tuesday that gold's struggling price has come regardless of a weaker US Dollar versus the Euro over the past month.