Gold Rally Can’t Hold; Soc Gen Sticks To Forecast

KITCO NEWS - French Bank Societe Generale has been bearish on gold since the start of the year, despite the metal's 15 percent gains. With gold down this Wednesday, hitting a three-week low, could the bank be right? In an interview with Robin Bhar, head of metals research for Societe Generale, he told Kitco News the recent gold (GOLD) - Get Report price rally looks unsustainable. The bank is taking the opposite view to rival Deutsche Bank that recently advocated buying the precious metal. Wednesday, the safe-haven metal was shunned as risk appetite among worldwide investors and traders picked up. April Comex gold settled the day down $24.60 at $1,224 an ounce.  Bhar explains that the bank's economists remain confident that the recent financial market turmoil and slowdown in emerging markets are unlikely to cause a recession in the U.S. He added that the market should gradually start pricing in a high probability of more rate hikes which is bearish news for gold.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.