ANALYSTS DISCUSS POSITIVE TRENDS FOR GOLD
February 01, 2012
The price of gold moved higher as the euro continued to gain against the dollar, with the metal trading at $1748.10 per ounce at 6:06 a.m. Pacific Time on the New York Spot Market and silver at $34.03 per ounce.
Improved German economic data helped gold build on gains in January. January saw the yellow metal’s strongest price performance in 32 years, gaining 11%. Patrick Legland, head of research at Societe Generale SA, said he expects gold to continue this trend, rising above $2,000 per ounce in 2012.
"Buyers have returned to the euro, which is helping the situation in gold," Ole Hansen, senior manager at Saxo Bank, said. "The last two weeks have done a heck of a lot to confidence, and we've seen that attempted corrections have been short-lived, so the mood has definitely changed."
"Concerns about Greece and Portugal are keeping demand for gold high and supporting the price. Yesterday gold defied the downward trend in commodity prices and a firmer U.S. dollar, increasing to an eight-week high of $1,748 per troy ounce," Commerzbank analysts said in a note. "There has still been no breakthrough in negotiations (on Greek debt) ... The sovereign debt crisis will thus continue to preoccupy the markets for some considerable time yet and should support the gold price," they said.
(Sources: "Gold to Rise Above $2,000 in 2012, SocGen Says," Bloomberg, February 1, 2012; "PRECIOUS-Gold keeps up rally after best January in 32 years," Reuters, February 1, 2012)
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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