Thursday 28 Mar 2024
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SINGAPORE (Oct 22): The Federal Reserve will probably raise rates in December and follow that with a further 100 basis points of increases over 2016, according to Goldman Sachs Group Inc., which stuck with a base forecast that the shift in U.S. monetary policy will hurt gold.

“The Fed’s rationale for wanting to start the normalization process is straightforward,” analysts including Jeffrey Currie said in a report. “In their view, labor-market slack has diminished substantially, the link between slack and inflation is stronger than widely believed, and the funds rate is far below the longer-term equilibrium rate, so they need to get started well before the economy is back to normal.”

Bullion was forecast to retreat to $1,100 an ounce in three months, $1,050 in six months and $1,000 in a year, according to the report, which was dated Oct. 21 and received on Thursday. Spot bullion traded at $1,166.86 an ounce at 8:23 a.m. in Singapore, 1.5 percent lower this year.

 

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