Goldman Sachs, which has been consistently bearish on the yellow metal this year, said gold prices will fall as investors gain confidence in the economic recovery, assuming inflation is subdued, reports Glenys Sim for Bloomberg.
“The net-long position in gold rose to 144,272 futures and options contracts in the week to July 8, U.S. Commodity Futures Trading Commission data show. That’s the highest since November 2012,” Sim reported for Bloomberg.
Gold could still be an attractive hedge with equities in some parts of the developed world looking richly valued. GLD is up 9.1% this year, a gain that has been buoyed by geopolitical concerns, including tensions in Eastern Europe and Iraq. Gold ETFs gained 1.7% last week on elevated fears regarding the health of Portugal’s banking system.
SPDR Gold Shares
Tom Lydon’s clients own shares of GLD.