The Buzz
Wall Street sours on gold
April 10, 2013: 2:06 PM ET
Gold prices have dropped more than 10% during the last six months, and Wall Street analysts don't think a rebound is in the cards.
Wall Street is turning its back on gold.
Both Goldman Sachs and Deutsche Bank lowered their year-end forecast for the precious metal this week, citing an improving U.S. economy.
Goldman slashed its target to $1,545 per ounce for 2013, down from its previously estimate of $1,610. The bank also lowered its outlook for 2014 to $1,350 an ounce, down from an earlier forecast of $1,490.
Meanwhile, Deutsche Bank reduced its year-end forecast to $1,637 an ounce. While that's still higher than gold's current price, it's almost 12% below Deutsche Bank's previous forecast of $1,856 per ounce.
Deutsche Bank analysts said gold will be challenged by an improving U.S. economy and noted that the "apparent disregard" for risks, such as the events in Cyprus, suggest that safe haven assets like gold could remain out of favor.
Related: 3 bond bubble theories that don't hold up
Gold price have dropped more than 10% during the past six months and are nearly 20% below their all-time highs above $1,900, reached in September 2011.
Goldman analyst Damin Courvalin said he's not expecting a rebound anytime soon. Gold settled at $1,558.80 an ounce Wednesday.
While the resurgence of worries about Europe's debt problems, particularly the Cypus crisis, and disappointing U.S. economic data, have pushed investors toward the safety of U.S. Treasuries, gold prices have been unfazed. In fact, gold fell to a one-month low just last week, a sign that conviction for the precious metal is weakening.
Given that lackluster movement in gold, and Goldman's' expectation that U.S. economic growth will accelerate later this year, gold prices will skew toward the downside, said Courvalin.
While some gold bugs argue that the price of the yellow metal will rise as inflation picks up, Courvalin argues that catalyst is "likely several years away."
-
Greek stocks tumble on eurozone woes
It's been a week of ups and downs in the U.S. stock market, as investors have been watching developments in Europe while digesting mostly positive news in the United States.
With all eyes focused on Cyprus, U.S. stocks have taken a pause from the rally that has been underway since early November. The Dow has been bouncing around 14,500 while the S&P 500 has been drifting between 1,550 and 1,560, MORE
Hibah Yousuf - Mar 27, 2013 12:41 PM ET -
Europe: Still a slow-moving train wreck
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
Now that it looks like Cyprus won't be leaving the eurozone, investors should not forget that the continent has bigger problems.
Sure, Cyprus yielded about a week of scary headlines, but the Cyprus obsession served as MORE
Paul R. La Monica - Mar 26, 2013 11:33 AM ET -
Investor fear on the rise
Political gridlock in Italy is unhinging investors.
Investors worry the results of Italy's election could wind up undermining the progress that Italy has made in overhauling its troubled economy.
"It was the worst possible outcome, feared by market participants and European policy-makers alike," said Daiwa Capital Markets European economist Tobias Blattner.
U.S. stocks spiraled downward in a late-day frenzied sell-off Monday. European markets followed their cue and sold off sharply early Tuesday.
CNNMoney's Fear MORE
Catherine Tymkiw - Feb 26, 2013 10:15 AM ET -
Europe's financial winter isn't over
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
I realize that Groundhog Day is mostly an American phenomenon. But if there were any furry, prognosticating rodents peeking out of their holes in Europe over the weekend, they probably didn't like what they saw.
Madrid MORE
Paul R. La Monica - Feb 5, 2013 1:03 PM ET -
Obama is not market's puppet master
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
The market plunged Wednesday and many on Wall Street were quick to point the finger at President Obama. The huge slide clearly must have been investors' way of showing how disappointed they were that Mitt Romney MORE
Paul R. La Monica - Nov 8, 2012 12:07 PM ETPosted in: Apple, barack obama, earnings, Europe, European Central Bank, federal reserve, fiscal cliff -
Fossil gets burned by Europe
Fossil's stock took a beating Tuesday, making it the second-worst performer on the S&P 500 (SPX) and Nasdaq (COMP), after the company reported weak revenue and cut back its sales outlook for the current quarter.
Fossil (FOSL) reported third-quarter sales of $684.2 million, falling short of the $713.1 million analysts had expected. Earnings fared better. Fossil beat earnings-per-share forecasts by 9 cents. But Europe, once again, reared its ugly head MORE
Catherine Tymkiw - Nov 6, 2012 12:30 PM ET -
Ford and GM rev up after earnings
Ford and GM rallied Wednesday after both automakers topped third-quarter earnings forecasts, despite soaring losses in Europe.
Shares of Ford (F) climbed more than 5%, as the company's record profit of $2.3 billion in North America helped offset its $468 million loss in Europe, bringing losses in Europe so far this year to just over $1 billion.
Meanwhile, General Motors (GM), the largest U.S. automaker, reported a third-quarter profit that trounced analysts' estimates. Though MORE
Hibah Yousuf - Oct 31, 2012 1:12 PM ET -
Robin Hood tax gains traction in Europe
Robin Hood may not have roamed Sherwood Forest for hundreds of years, but fans of his "steal from the rich, give to the poor" ethos appear to have made inroads into European tax policy.
The European Union's executive body said Tuesday that 10 members of the 27-nation group had agreed to move forward with a Financial Transaction Tax, also known as the Robin Hood tax.
Supporters say the controversial move will MORE
Ben Rooney - Oct 24, 2012 10:02 AM ET -
Earnings stink like a big pile of trash
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
Investors are in an Oscar the Grouch-like mood. But unlike the fuzzy, green Muppet, they don't love trash. And that's exactly what the latest slew of corporate earnings reports are: Dirty, dingy and dusty. Rotten, ragged MORE
Paul R. La Monica - Oct 23, 2012 12:06 PM ET
- No life of luxury: Nordstrom stock falls(0:52)
- Kohl's is the anti Wal-Mart(1:03)
- Nothing runs like a Deere (investor)(1:16)
- Who says video game stocks are dead?(1:22)
- Bond investors fear another 1994(1:09)
- The Gap is cool again?(1:03)
- Crazy like a Fox: News Corp. soars(1:17)
- SodaStream loses its pop(1:10)
