Investors have sold bullion at a record pace from exchange- traded products this year. Holdings in ETPs have contracted 684.1 metric tons to 1,947.8 tons after shrinking every month in 2013, according to data compiled by Bloomberg.
Credit Suisse Group AG raised the possibility of gold trading below $1,000 in May as Ric Deverell, head of commodities research at the bank, said then that bullion was going to get crushed as inflation risks remained muted. That forecast was for bullion in five years’ time.
“The real key in gold is to see the evidence of the improving economic data in the U.S.,” said Currie, who is based in New York. Weakening emerging-market currencies, especially the South African rand, will also help to reduce the cost of production in dollars, he said
The Institute for Supply Management’s factory index showed U.S. manufacturing expanded in August at the fastest pace since June 2011. The group’s gauge of service industries, which cover almost 90 percent of the economy, posted the highest reading since December 2005, according to data compiled by Bloomberg.
Disaster Insurance
Gold has fallen this year because investors see less need for disaster insurance, Bernanke said in July. One reason that prices are lower is that people are less concerned about extreme outcomes, particularly negative, he said.
The U.S. federal government needs to increase its debt limit later this year, and Goldman expects that the ceiling will be raised by the end of next month, according to the Sept. 11 report. On Syria, U.S. Secretary of State John Kerry met with Russian Foreign Minister Sergei Lavrov this week to seek to get Syria to give up its chemical weapons.