Goldman Sachs Group’s Jeffrey Currie sees gold losing its sheen by the year end

NEW YORK: Goldman Sachs Group’s Jeffrey Currie isn’t backing down from his bearish call on gold. As bullion’s 10 per cent rally this year beats gains for equities, commodities and Treasuries, he’s sticking with the view that the metal will be lower by the end of December as the economy improves. Currie, who last year got ahead of the biggest gold collapse since 1980, is an undeterred bear even as hedge funds add to their bullish holdings for a fifth straight week and assets in exchange-traded products advance.

Currie isn’t alone in predicting the end to a rebound that drove the best first-half performance for gold since 2010. Societe Generale’s Michael Haigh, who also correctly forecast 2013’s slump, said he expects the metal will drop about 6 per cent by the fourth quarter.

Defying the analysts, money mangers are now holding the biggest bet on a bullion rally since 2012 as prices posted the longest streak of weekly gains in three years. “Some people are moving into inflationary hedge assets,” Currie, the bank’s global commodities research head with a PhD in economics from the University of Chicago, said in a July 11 telephone interview. “Gold will start moving lower once there is more confidence in the recovery, without significant inflationary concerns.” Prices will “likely end lower this year,” he said.

LONGEST STREAK

Futures gained 1.3 per cent last week to $1,337.40 an ounce on the Comex in New York, a sixth straight advance and the longest streak since August 2011. The Bloomberg Commodity Index of 22 raw materials climbed 3.3 per cent this year, while the MSCI All-Country World Index of equities rose 4.9 per cent.