'Too Early' on Gold Turn Around, Nomura Says (GLD)

While Gold has seen a swift rebound on more dovish fed comments, Nomura analyst Yen Voo said downside risk in the precious metal persists until the Fed's decision. He said short covering on gold futures and better imports are lilkely a timing facade as underlying demand is absent. The firm maintained their USD 1,075/oz target for gold for the 2nd-half of 2015.

Voo commented, "The less hawkish FOMC minutes and renewed risk-off environment has led to the recent rebound in gold price from its trough of USD 1,085/oz. Although gold futures and import data have improved, we think it is still too early to see a significant price rebound, as underlying consumer demand appears absent and the Fed’s decision is capping the upside. We maintain our gold price forecast of USD 1,075/oz for 2H 2015, USD 1,175/oz for 2016 and USD 1,300/oz in the longer term. We also maintain our Reduce recommendations on RRS (4,200p) and CEY (50p), and Neutral on ACA (285p)."

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