Battered gold looks at risk of further thumping

SINGAPORE (Nov 30): The worst is yet to come. At least that’s the opinion of the top two gold forecasters who say bullion will suffer further losses in 2017 as interest rates climb and the dollar strengthens.

Oversea-Chinese Banking Corp. and ABN Amro Group NV see gold sliding to US$1,100 ($1,567) an ounce by the end of next year as the Federal Reserve tightens monetary policy, real Treasury yields increase and the US currency rises. Prices were at US$1,190.28 on Wednesday. The banks were ranked first and second as gold forecasters in the third quarter, according to data compiled by Bloomberg.

After briefly soaring to US$1,337.38 as it became clear that Donald Trump was about to pull off a shock victory in the US presidential election, gold slumped to a nine-month low of US$1,171.18 last week on speculation that his pledges to increase spending and revitalize the economy would boost interest rates and augment the attraction of other investments such as stocks and bonds.

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