GOLD TRADERS MOST BULLISH SINCE ‘04
Gold prices climbed higher on the New York Spot Market as continuing uncertainty regarding the Eurozone debt crisis sparked renewed safe haven buying. Standard Bank analyst Walter de Wet told Reuters, "The European Central Bank will have to create more money to assist the debt burden in Europe and that will be good for gold." Mr. de Wet expects prices to test $2,000 an ounce early next year. (Reuters, 11/11/11)
U.S. equities rallied after Greece took measures to resolve the country’s debt crisis and new austerity measures were passed by the Italian senate. Greece’s new prime minister, Lucas Papademos, a former banker and European Central Bank vice president, is working to form a new national unity government. "The small bounce back we're seeing is because there's a little hope that with new governments in Greece and Italy, we'll have more of an aggressive stance in putting austerity measures into place," said David Jones, chief market strategist at IG Markets. Jones remains cautiously optimistic with regards to Italy’s successful passage of new austerity measures. "This is important because it's the first vote in Italy on austerity cuts, but we still have to have a second vote next week, so for now it looks like it might just give us a day off from worrying about the crisis," said Jones. (CNN Money, 11/11/11)
Bloomberg reports this morning that gold traders are now the most bullish they’ve been since 2004, according to its most recent survey. The debt crisis of the Eurozone has increased demand as investors move funds into traditional safe-haven assets. According to the report, “Twenty-one of 22 surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the third consecutive increase and the highest proportion in data going back to April 2004.” The report goes on to state the median estimate of eight of the 10 most-accurate forecasters tracked by Bloomberg estimate gold will reach $1,950 in early 2012. (Bloomberg, 11/11/11)
†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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