Ric Deverell, head of commodities research at Credit Suisse Group, told reporters in London on Thursday that gold will trade at $1,100 an ounce in a year and $1,000 in five years. And then for emphasis he added this:
In the next couple of weeks, Deverell said he sees gold slipping to $1,350 an ounce, saying it’s still too pricey compared to other “real assets,” using base metals as an example. As of May 15, Credit Suisse was forecasting gold would drop to below $1,400 in a year. Big banks rushed to cut gold forecasts as the metal fell out of bed in April, and perhaps a new slew of downgrades is yet to come, with Credit Suisse leading the pack.“Gold is going to get crushed. The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”
Deverell has no faith in central-bank buying either.
Nor does he care that China and India are keenly buying up gold jewelery and bars (see Soros splits with Chinese housewives on gold). The World Gold Council came out swinging in defence of gold the other day, saying that ETF gold holdings – up 2% in the quarter — mean less to gold’s price than the physical buying.“When gold is going up, it looks like a great idea to buy more gold,” Deverell said. “And when it’s going down, do you really think risk-averse central bankers are going to try and catch the knife? No.”
Deverell made mince meat out of the physical-buying side.
by : marketwatch“This is bargain-buying. It’s like when you have cash for clunkers in autos, you bring forward activity, but it’s not a massive addition to buying.”
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