Morgan Stanley cuts its gold targets for the next two years
Bullion prices ended lower by 0.3% on Wednesday, 22 January 2014. Gold futures suffered a loss on Wednesday for a second day in a row, with investors discouraged by a bearish call from yet another investment bank. There is a lack of major, markets-moving fundamental news this week, which is allowing technical trading to dominate.
Gold for February delivery fell $3.20, or 0.3%, to settle at $1,238.60 an ounce on the Comex division of the New York Mercantile Exchange, its lowest close in a week.
March silver fell 3 cents, or 0.2%, to $19.84 an ounce after Tuesday's 2.1% drop.
Morgan Stanley cut its gold targets for the next two years, with the bank's analysts saying strength in stocks as well as regulatory pressures will hurt prices. The bank reduced its 2014 average gold-price forecast by 11.6% to $1,160 an ounce and dropped its 2015 forecast average by 12.5% to $1,138 an ounce.
The next big scheduled economic event for the market place is next week's meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). Trading could remain subdued until the conclusion of the mid-week meeting.
In overnight news, reports said investor demand for a Spanish 10-year note was strong Wednesday. This follows good demand for sovereign bonds issued by Ireland and Portugal. Less than two years ago these European Union nations were on the verge of financial collapse. This news continues a trend of upbeat economic data coming out of the EU.
The Bank of Japan kept its monetary policy unchanged at its latest meeting that ended Wednesday. The BOJ has embarked on a very stimulative monetary policy that aims to get yearly inflation up to 2% in two years. Japan has been wracked by deflationary price pressures for many years.
Today's economic data at Wall Street was limited to the weekly MBA Mortgage Index, which rose 4.7% to follow last week's 11.9% increase.
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