BofAML: Sobre el precio del oro (Global Metals Weekly)

Redacción - Jueves, 18 de Febrero

• 
• 
• 
• 
• • 
  • 
  • 

Global Metals Weekly: From uber-bearish to supportive gold • All of the usual gold price drivers have been bearish in recent years. Yet, macro has become more supportive.• The Fed can't go it alone; inflation prevents aggressive hikes. Volatility stepped up a gear. Lack of policy coordination. • Our S/D model suggests that lack of investor selling means gold prices should continue to trade above $1,000/oz.

Updating 1H forecasts, reinforcing gold at $1,250/oz in 4Q

The rally into 2016 reinforces our view that gold is in the process of bottoming out. Given the recent price strength, we are marking to market forecasts for 1H16, but continue to expect that the metal will end the year at $1,250/oz. Looking at the drivers of this dynamic, our less bearish view is heavily influenced by the current macro-economic environment, with USD, rates, volatility and oil becoming more supportive, after all of these variables posed significant headwinds to the yellow metal in recent years. Increased monetary policy coordination, not our base case, is a key risk to our outlook.

Global growth subdued; difficult for Fed to go it all alone

There are various angles to approach reduced headwinds to gold quotations. In our view, the weakness of potential GDP growth is a good starting point. Authorities around the world have tried to stimulate growth and given tight fiscal policies and lack of reforms, central banks have been in the driving seat. This is visible in negative yield curves in a range of countries. Against the trend, the Fed tried going it alone in tightening, but a stronger USD and falling inflation expectations, among other issues, suggests that an accelerated hiking cycle is unlikely. Put differently, structurally lower growth has put a limit to a cyclical normalisation of rates in the US. In fact, if the Fed hiked less aggressively (our US economics team today adjusted expectations) and let inflation rise or potentially overshoot the 2% mark, thus keeping real rates low, this would be a sharp contrast to last year's dynamic and supportive to gold.

Volatility has moved up a gear

Weak economic growth, continued monetary easing and lack of policy coordination have all been critical in pushing volatility higher. Sticking with the lack of coordination, we highlighted before that competitive devaluations are not a zero-sum game, as rising volatility makes everyone involved worse off. Against this backdrop, recent comments by PBoC Governor Zhou Xiaochuan are worth noting, suggesting that major global currency co-ordination is unlikely over the next few years. Of course, loose monetary policy has other side effects as well, with concerns over another round of easing contributing to the turmoil in Europe's banking sector of late, for instance.

Investor buying supportive, China/ India buyers absent

Switching to the physical market, ETF buying highlights that investors are becoming less bearish; in fact given the lack of non-commercial selling, our supply and demand model suggest that gold prices should remain well supported above $1,000/oz. Having said that, the lack of gold demand from India and China, which could exacerbate price upside, remains a wrinkle.

[Volver]