Gold priced in euros has the potential to move higher as central banks throughout the region introduce negative interest rates, says Jessica Fung, commodity analyst at BMO Capital markets. However, gold in U.S. dollars will continue to struggle as the U.S. economy continues to improve, she adds. “There is little potential for significant upside in gold prices as long as there is a consensus expectation that an economic recovery is on the horizon, no matter how slow,” she says. “Though the timing of the Fed rate hike could get pushed out further, BMO Research expects gold prices [in dollars] to trade sideways to down so long as markets continue to anticipate a rate hike at all.”
