
GOLD HITS ANOTHER RECORD AT $1,227.50
The metals are experiencing some slight correction this morning after gold reached a high of $1,227.50. At this point, gold is down less than a dollar in very early trading, having seen profit-taking and then rebounded. The silver market is a bit weaker. It reached $19.50 an ounce and then slipped back $.34 to $18.99. All of the metals are reacting to a stronger dollar, which rose 7 basis points at 74.74 on the index. The equity market is slightly higher and oil is up $.37.
The correction in the metals markets occurred during comments by European Central Bank President Trichet. However, Dow Jones Wire Service reported that investor appetite for the metal remains strong. Trichet said that the ECB will continue to provide ample liquidity to the euro zone banking sector, but that the 12 month refinancing operations would be ended next March and no longer offered at the ECB's low 1% policy rate. The continuation of the stimulus into March of next year is a factor that caused the euro to fall back and essentially the weaker euro put pressure on gold. This is because gold is viewed as a dollar hedge and more broadly as an alternative currency. Barclay's Capital analyst Suki Cooper told Dow Jones Wire Service, "Sentiment remains very positive toward gold."
In the economic news initial claims for jobless benefits fell 5,000 to 457,000 in the week ending November 28th. That was better than expected. Nevertheless,we continue to lose jobs at an unbelievably high rate.
In the euro zone they are also forecasting sluggish growth next year in a range of .1% to1.5%.
The most interesting thing about the gold market today is that there are big buyers waiting on the sidelines to buy the dips. While gold may be experiencing a mild consolidation at this point, the upside momentum is so powerful that most analysts think gold will see higher levels before year end. Clive Lambert at Futures Tech told Dow Jones Wire Service, "Gold's technical outlook is very bullish with gold on track to rally to $1,250 to $1,300 an ounce and unlikely to dip below $1,200." On a consolidative or corrective move, gold certainly looks like a great buying opportunity. That concept is reinforced by the fact that there are analysts such as Francisco Blanche of BofA/Merrill Lynch who forecast $1,500 for gold over the next 18 months and that David Rosenberg, formerly the chief market strategist for Merrill Lynch, said he sees the potential for gold to riseto $2,600. All of these analysts are highly respected.
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†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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- S&P Capital IQ - Gold: $1,900 (in 2012) "Leo Larkin, metals and mining analyst at S&P Capital IQ, thinks that $1,900 gold might not be that much of a stretch [in 2012]. 'Gold has been ..."
- Citigroup - Gold: $2,300 - $2,400 (by end of 2012) "While we remain cautious on Gold in the near term...we continue to believe that the bull market remains intact...we believe that 2012 may be..."
- Leeb Capital Management - Gold: $2,500 - $3,000 (in 2012) "I'll give you my target for gold at the end of 2012, it's going to be trading somewhere between $2,500 and $3,000. This..."
- Global Hunter Securities - Gold: $1,800 (in 2012) "'What I am looking for is a gold price of $1,800 an ounce in 2012,' says Jeffrey Wright, senior research analyst at Global Hunter..."
- US Global Investors - Gold: $3,600 (by 2017) "'People get so caught up with the next three minutes for gold and they should really be focused on the next three years,' says Frank Holmes, ..."
- Goldman Sachs - Gold: over $1,900 (in 2012) "Wall Street investment bank Goldman Sachs predicts that gold's bull run will continue into 2012 with a low interest rate environment and..."
- CNBC - Gold: $2,400 (no period given) "Gold will top $2,400 an ounce. The long-term bull market in gold marches on. Gold won't make a straight shot to a new inflation-adjusted high. As long..."
- Nomura - Gold: $2,000 (by end of 2012) "Nomura has raised its forecast for gold prices to $2,000 an ounce by the end of 2012, from $1,800 earlier. The brokerage said the low-interest rate..."
- Morgan Stanley - Gold: $2,200 (in first half of 2012) "Gold will lead a rally in commodities in 2012 as Europe's sovereign-debt crisis continues to roil financial markets, spurring demand for ..."
- UBS - Gold: $2,050 average in 2012 "[Gold] remains one of the top commodity picks for 2012 as 'most of the factors that pushed gold higher in 2011 are not going away,' according to UBS..."
- Bank of America Merrill Lynch - Gold: $2,150 - $2,200 (average in 2012) "From a technical perspective we believe that the bull trend for gold remains intact… with gold having not yet met any of..."
- TheStreet.com - Gold: $2,500 (by May 2013) "I want to own gold here. I think gold is going to $2,500 eighteen months from now... Gold has been up for ten straight years and this going to be the..."


