Morgan skeptical of gold move

|By:, SA News Editor

Up 1.1% to $1,338 per ounce, gold takes out a new YTD high - with the GLD now ahead by 11% for 2014 - but the team at Morgan Stanley is a seller of the rally.

Calling the move an overdue bounce following five quarters of declines and heavy ETF outflows, Morgan says the metal is still held hostage by rising real interest rates and the strong greenback. The team also notes one conspicuous feature of the "bounce": Relatively low volume.

Morgan's forecast for gold is $1,160 this year and $1,138 in 2015, both below the estimated $1,200 marginal cost of production.

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