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Barclays Lowers Gold Price Forecast, Raises Palladium Outlook

By Kitco News
Wednesday September 17, 2014 9:01 AM

(Kitco News) - Barclays on Wednesday lowered its price forecast for gold, citing “an increasingly bearish macro backdrop developing for gold,” while raising its outlook for palladium.

“Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year,” the bank said.

Barclays lowered their fourth-quarter average gold price forecast to $1,220 an ounce. They now expect prices to average $1,270 an ounce in 2014. Their 2015 forecast calls for an average gold price of $1,180.

Palladium’s “sizable” deficit “will likely overpower the downside risk presented by a weaker gold price and a stronger dollar and reinforce the longer-term support for prices,” Barclays said.

They hiked their 2014 and 2015 price forecasts for palladium to $816 an ounce and $890, respectively. Barclays reduced their platinum price forecasts to $1,424 an ounce and $1,451, “in light of plentiful above-ground stocks capping upward momentum.”

Regarding the platinum group metals, Barclays said declining platinum stocks and strong auto demand will support the white metal at lower levels. “Palladium should be exposed to the upside, yet could suffer from profit-taking among investors, given record ETP (exchange-traded product) holdings and speculative positioning,” they said.

The bank left its 2015 silver price forecast unchanged at $17 an ounce “in expectation of further downside pressure.”

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By Debbie Carlson of Kitco News; dcarlson@kitco.com
Follow me on Twitter @dcarlsonkitco



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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