LOW RATES AND LIQUIDITY “SUPPORT INVESTMENT” IN GOLD

by Goldline.com | August 18, 2010

Gold is trading in a tight range on the New York Spot Market as of 10:50 a.m. EST despite mild profit taking. Investors flirted with taking profits, but were reluctant to sell out of large gold positions and continued to hold the metal as a safety haven asset. This dedication to gold could set the stage for a rally in the fall. Gold prices historically can rise as much as 2.5% in September. (The Street, 8/18/10)

Stocks are down on the New York Stock Exchange as investors remain cautious in a session with no major economic reports due today. "Investors are looking for evidence in the daily economic data to figure out whether a double-dip recession can be averted or is our destiny, " said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "In the absence of economic news, the market will see a pretty listless session." (CNN Money, 8/18/10)

Walter de Wet and his team at Standard Bank predict continued upside momentum in gold prices, setting a short-term price target of $1,250 an ounce. "We view liquidity and low real interest rates as the fundamental drivers of gold investment demand," he said today in a report to investors. "Even if risk appetite improves, gold should rise. $1250 remains a logical short-term target." (Goldseek, 8/18/10)

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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..."