Further downside in store for gold?

Gold has been making headlines in recent weeks, with prices falling below US$1100 /oz. to a 5-year low. Increased expectations that the Federal Reserve will beginhiking interest rates later this year and a strengthening U.S. dollar has underpinned the move lower. 

Lack of physical and investment demand, particularly in China, combined with our forecast for a September rate hike and ongoing strength in the greenback, suggest further downside is in store for gold in the coming months. 

"Prices are expected to average US$1025 in the final quarter of this year before heading back up to US$1200/oz. by the end of 2016", says Economics TD.