Morgan Stanley Looks For Gold To Eventually ‘Struggle’Monday...

Morgan Stanley Looks For Gold To Eventually ‘Struggle’
Monday February 24, 2014 8:51 AM

Morgan Stanley says it fears gold will “struggle” down the road despite the recent rally in prices. The firm lists four factors boosting gold so far this year: concerns over the strength of the global economy, strong physical demand at lower prices, an “overdue” technical bounce and investors tip-toeing back into the market. “While the upward momentum could continue in the very near term, we do not see prices staying at current levels,” Morgan Stanley says. “With Fed policy unchanged, we think gold will struggle to perform in the face of rising real interest rates, bond yields and USD.” However, the firm does list risks to its forecast of declining gold over the next one to two years, including a “hard landing” for the Chinese economy or developed-market economies, a continuation of the recently neutral trend of exchange-traded product flows and strong Chinese and Indian demand.

By Allen Sykora of Kitco News; [email protected]