Citi Research says gold has been one of the best-performing assets so far in 2016 but questions how long this will last. The bank had called for gold to average $1,080 an ounce in the first half. “The upside risk to this view is one dominated by China and the associated global equities rout, which could see prices breach $1,150/oz,” Citi says. “Downside price risks to our gold view could be a rebound in risk appetite from investors, particularly in U.S. equities. For now, we believe safe-haven attributes remain supportive for gold in the short term; however, we are not fully convinced that these themes will prevail into the remainder of the year. Despite outperforming the rest of the base and precious metals YTD (year to date), it is hard to see gold breaching the key level of $1,200/oz in 1Q16.”
