Although gold prices opened the week on a lower note, one strategist remains optimistic on the metal’s price. At the annual London Bullion Market Association (LBMA) conference in Vienna, Bart Melek, head of commodity strategy at TD Securities, told Daniela Cambone that he expects gold prices to strengthen this quarter, while base metals may take a hit.
‘We did upgrade our forecast in the short term [for gold], and that’s very different than what we did for the base metals,’ he said. ‘The main reason why we think gold has a little bit of upside, at least for the next couple of months, is related to US monetary policy,’ he explained.
According to Melek, the Federal Reserve is in no position to increase interest rates given the recent weakness in U.S. economic data. If the Fed does not pull the trigger on rate hikes, Melek said it will hurt the dollar and in turn help gold. ‘At this stage, we’re looking at a high of $1,225 [for gold],’ he said. December gold futures were last quoted down at $1,175.60 an ounce.
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