Hope for gold bears.
US investment bank giant Goldman Sachs, which predicted oil could drop to as low as $20/barrel, thinks the current rally in gold unlikely to last and not only that but Gold could drop to as low as $1000/troy ounce by end 2016.
Goldman is also quite bullish on US economy. It believes US economy would go above trend and expects inflation to edge up riding on higher consumer spending. While Fed funds future is pricing with more than 70% probability that FED will not be able to hike rates in 2016, Goldman is calling for three hikes in 2016. If that would be the case, then Gold can drop to $1000/barrel, however we at FxWirePro, as of now, can't see triple hikes in 2016.
Gold is currently trading at $1188/troy ounce, and testing a channel ceiling that has been in place since April 2013. We expect Gold to try to break the channel and trade as high as $1230 area. However Gold's movement around the channel floor could decide on the next move.
