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Analysts Give Long Term Outlook for Gold

Release Date: 
Thursday, December 15, 2011

Gold prices recovered from yesterday's lows in morning trading on the New York Spot Market with gold rising to $1589.40 per ounce as of 6:33 a.m. Pacific Time. Silver was trading at $29.17 per ounce.

Negative investor sentiment on Europe has recently been driving the dollar higher while the gold price has trended lower. Several analysts, however, offered positive longer-term outlooks for gold.

According to UBS, gold is one of the top commodity picks for 2012, since "most of the factors that pushed gold higher in 2011 are not going away." The Swiss bank expects gold to average $2,050 per ounce next year.  "So long as uncertainty abounds, gold has a fighting chance of outpacing many asset classes," UBS analysts including Julien Garran wrote in a report yesterday.

"Investors with a medium- and long-term view are remaining loyal to gold, and gold ETFs are still showing no outflows. In our view, bargain hunters are soon likely to take advantage of the low price levels," Commerzbank analysts wrote in a note.

"We remain bullish on the long-term outlook for gold and comfortable with the relatively modest position that we currently hold for the time being," Charles Morris, Head of Absolute Return, HSBC Global Asset Management, wrote in a note.

(Sources: "PRECIOUS-Gold rebounds on weak dollar, caution remains," Reuters, December 15, 2011; "UPDATE 1-Investors' cash grab shreds gold's safe-haven status," Reuters, December 15, 2011; "Gold Extends Rout as Haven Investors Target Dollar on Europe," Bloomberg, December 15, 2011)

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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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