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Analysts Say Gold Could Rise This Year on Easing

Release Date: 
Wednesday, October 3, 2012

Gold prices touched near 11-month highs as data from payroll processor ADP showed U.S. private payrolls rose by 162,000 in September, beating economist expectations. Gold was $3.90 higher at 7:37 a.m. Pacific Time on the New York Spot market, trading at $1,779.30 per ounce. Spot silver was $.08 higher at the same time, trading at $34.80 per ounce. (Click here for the most current spot prices.)

“I think gold can go much higher. There is not a number for the price of gold you can give that would shock me," said Ron Carson, founder and CEO of Carson Wealth Management Group in Omaha, Nebraska. "If the Fed and other central banks continue to pile on more debt, commodity prices will go through the roof."

Rob Lutts, President of Cabot Money Management in Salem, Mass., believes gold could rise to $3,000 per ounce over the next three to five years. "When I first started recommending gold at $400 an ounce people thought it may just go to $1,000," Lutts said. "But what's changed in the past few years is the notion of how temporary all this easing is."

Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong, said, “My suspicion is that we'll get more monetary policy responses from other central banks as the Fed program kicks off and the ECB program starts, probably by the end of this month. That's bullish for commodities like gold."

“We believe that gold has some upside potential over the short term,” said Frederic Panizzutti, senior vice president at MKS Group. “Likely we will test over $1,780 again very soon and possibly break over $1,800 an ounce. [Quantitative easing] is to have an impact and the general sentiment is that gold will close higher this year.”

Yuichi Ikemizu, head of commodity trading at Japan Standard Bank, said "...towards the end of year [gold] is likely to hit [the] $1,900 level."

 (Sources: “Gold futures edge higher in choppy action,” MarketWatch, October 3, 2012; “Gold nears 11 month high; eyes ADP jobs report,” Reuters, October 3, 2012; “PRECIOUS-Gold holds near 11-month high on Spain caution,” Reuters, October 3, 2012; “PRECIOUS-Gold hits one-week high as Spain, oil support,” Reuters, September 28, 2012; “Gold is not just a lunatic fringe investment,” CNN Money, September 28, 2012)

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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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