Goldman slashes gold, copper, $A forecasts

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From Goldman today:

Commodity and currency forecast changes
Our Global ECS team expects the gold price to drop in the medium term: its new December 2014 forecast of US$1,050/oz is lower than spot gold, and lower than its US$1,300/oz forecast for the remainder of 2013.

The team has also lowered its copper price forecast in the short term, and now forecasts a 2H13 price of US$3.12/lb (was US$3.55/lb) and 2014 copper price of US$2.99/lb (was US$3.15/lb).

The A$ passed through our economists’ previous 3-month target due to a combination of the US Fed entertaining tapering QE, poor commodity price trends, the subsequent sell down in Australian equity positions, and signs that the demand for A$ assets by reserve diversifiers has paused. Our economists therefore lowered their A$/US$ forecasts to 0.86 in in 2014 (was 0.91) and to 0.85 in 2015 (was 0.89)

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.