Gold price lows around the first Fed rate hike in nearly a decade expected next week may be a buying opportunity, with gold expected to rise above $1,100/oz in 2016, Standard Bank said in a note Thursday.
"Macro drivers and market positioning suggest further lows for gold prices in the coming weeks, but, we believe this will present a buying opportunity for the longer-term investor," the bank said.
Standard Bank forecasts prices to average $1,095/oz in the first quarter 2016 before recovering on a "shorter and shallower Fed hiking cycle than expected, price-elastic physical demand and central bank buying."
Prices are forecast to reach $1,160/oz by the end of 2016, and average $1,130/oz for the year. Prices have averaged $1,165/oz for 2015 year to date, with gold down almost 8% since January.
The London Bullion Market Association Gold Price settled at $1,072/oz Thursday morning, down $9/oz on the previous session.
Silver, palladium and platinum are also expected to recover next year after the Fed policy rate hike, with supply expected to respond to the weakened demand situation in 2015.
"The lower price environment is likely to feed through to a supply response, with mine curtailments as well as a decline in recycling," the bank said.
2015 saw jewelery demand for platinum lower, whilst a slowdown in auto sales has hit palladium and slower industrial demand has weighed on silver despite the uptick in solar demand.
Silver is forecast to move up in the first quarter to $14.40/oz and reach $15.10/oz by the fourth quarter. The LBMA Silver Price settled at $14.27/oz Wednesday.
Palladium and platinum are also expected to move higher in the first quarter, to $625/oz and $915/oz respectively, before reaching $680/oz and $1,025/oz in the fourth quarter.
The LBMA Palladium Price settled at $544/oz Wednesday and the LBMA Platinum Price settled at $855/oz Wednesday.
