For top gold forecaster BNP Paribas SA, bullion bulls are up against a clear and present danger -- the U.S. Federal Reserve. The central bank’s plan to raise interest rates again this year while potentially reducing its balance sheet is negative for the non-interest bearing asset, says Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas in London, which topped Bloomberg’s gold accuracy rankings in the second quarter. He’s among the most bearish forecasters, betting bullion will drop to $1,165 an ounce in the fourth quarter, from $1,225 on Thursday. Gold posted its first monthly loss this year in June as indications of stable economic growth cut demand for haven assets and investors looked past geopolitical concerns, including U.S. tensions with North Korea and conflict in the Middle East. At the same time, central banks are signaling higher borrowing costs, prompting hedge funds and other large speculators to reduce long positions in U.S. bullion futures and ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.