Due to the current oil crash, the longest fall in a generation, Gold is losing it's power as the ultimate inflation hedge, which according to Bloomberg is dragging down the price of the commodity.
The oil collapse means that instead of the surge in consumer prices that gold buyers have been expecting for much of the past decade, the U.S. is “disinflating,” Bill Gross, who used to run the world’s biggest bond fund said.A gauge of inflation expectations monitoring gold is headed for the biggest annual drop since the recession in 2008.
The metal’s appeal as an alternative asset is fading as the dollar and U.S. equities rally, and as the Federal Reserve moves closer to raising interest rates to keep America's economy from overheating.
Investor holdings in exchange-traded funds backed by gold last week were the lowest since 2009, and $7.68 billion has been wiped from the value of the funds in 2014, according to data compiled by Bloomberg.
Open interest in New York futures and options dropped 5.3 percent this year, set for a second annual loss and the longest slump since 2005, U.S. government data show.
After rebounding 4.4 percent from a four-year low in early November, prices will average $1,175 next quarter, below the Dec. 22 close of $1,179.80, according to the median of 31 analysts tracked by Bloomberg. Goldman forecasts a drop to $1,050 by next December, while SocGen expects $950 in 2015’s fourth quarter.
#10rubies #Gold #Oil
No comments:
Post a Comment