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Analysts Predict Gold May Move Higher in 2013

Release Date: 
Tuesday, January 8, 2013

The price of gold rose today on expectations the European Central Bank will not reduce interest rates at its meeting this week, raising the euro’s value relative to the dollar.  Gold was $7.70 higher at 7:02 a.m. Pacific Time on the New York Spot Market, trading at $1,655.60 per ounce.  Spot silver was $0.20 higher at $30.46 per ounce.  (Click here for the most current spot prices.)

Several analysts recently stated gold could move significantly higher in 2013, in part on expectations of continued fiscal liquidity.  "We think gold still has a chance of breaking above $1,800 and even reach $1,900 in the first half of the year due to fragile economic recovery in the United States and easing policies by central banks," said Li Ning, an analyst at Shanghai CIFCO Futures.

Eugen Weinberg, head of commodities research at Commerzbank, believes gold may reach a new high in 2013.  “In the longer term, it’s still a bull market…we are forecasting the price to rise to $2,000 by the end of this year,” he said.

“Most of the banks that have been forecasting the end of the bull run each year for the last twelve years have been notoriously wrong,” Mr. Weinberg noted.  “I think this bull run will only end when we have the central banks and the governments coming to different recipes rather than printing money, rather than increasing liquidity…as long as this environment stays favorable, I think the gold price will continue [to rise].”

HSBC forecasts that gold may average $1,760 a troy ounce in 2013.  "Gold prices will recover this year," HSBC's Jim Steel said, citing central banks' easy-money policies and low interest rates.

"At the end of the day, we expect [Fed Chairman] Bernanke's accommodative stance to dominate," BNP Paribas analyst Anne-Laure Tremblay said in a report.

Credit Suisse forecasted that gold may average $1,740 per ounce in 2013.

Phillip Futures analyst Lynette Tan expects demand from China to start picking up with the approach of the Lunar New Year next month.

(Sources: “PRECIOUS-Gold edges up on euro, Asia physical buying,” Reuters, January 8, 2013; Gold Consolidates in Cautious Asian Trading; Precious Metals Mixed,” Wall Street Journal, January 8, 2013; “PRECIOUS-Gold prices crawl up, shaky U.S. jobs data supports,” Reuters, January 7, 2013; “Commerzbank Favors Industrial Metals in 2013,” Bloomberg, January 4, 2013; “Gold Seen Rallying From Worst Streak in Eight Years: Commodities,” Bloomberg, January 4, 2013; “Gold Eases After Rally, Adds to Losses After Fed Minutes,” Wall Street Journal, January 3, 2013)

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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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