We think that sentiment towards gold is now excessively negative. Nonetheless, given the difficulty in valuing an asset that pays no income and the importance of safe-haven demand, which is also largely subjective, the current market mood cannot be ignored. Accordingly, we are pulling down our forecasts for the price of gold and also for silver. While we remain positive on the medium-term outlook for both metals, a strong recovery may have to wait for markets to digest the first Fed rate hike.
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