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Analysts Say Gold May Move Higher in 2013

Release Date: 
Monday, December 31, 2012

The price of gold rose on the last trading day of 2012 as Washington continued to seek a fiscal cliff resolution.  Gold was $6.90 higher at 7:49 a.m. Pacific Time on the New York Spot Market, trading at $1,664.20 per ounce.  Spot silver was 0.06 higher at $30.19 per ounce.  (Click here for the most current spot prices.)

Chris Blasi, Neptune Global Holdings CEO, predicted that gold could reach upwards of $1,900-$1,950 per ounce in 2013.  He cited central bank buying as one key support and noted that the Bank of International Settlement has reclassified gold as a Tier 1 asset for 2013, which has far-reaching implications.  “That’s significant, just as far as the perspective of where’ gold’s place is as money,” he said.

“I believe gold is a long-term store of wealth and should be a part of every portfolio,” Mr. Blasi said.  “Since I believe it’s a longer-term hold, we believe that physical holding is of great value.  This is one of the unique assets that an investor can actually own directly and not have a financial instrument put between them and the asset.”

"Since 2008, gold has correlated the best with our national debt ceiling," said Edmund Moy, chief strategist of Morgan Gold and a former director of the U.S. Mint.  "If Congress lifts that debt ceiling to $18 trillion, I see gold rising to $1,800…”

Helen Lau, an analyst with Singapore securities company UOB Kay Hian, said gold could reach $1,800 per ounce in 2013 on continued liquidity from the Federal Reserve and other central banks including the Bank of Japan.

The outlook for gold is "still positive," said Dominic Schnider, head of commodity research at UBS Wealth Management.  "All of the elements for higher precious metal prices are here. The Fed is continuing its stimulus, balance sheets are exploding around the world, and real interest rates are in negative territory."

"Gold prices have been an economic and political barometer for the well being not just of the economy, but of the world," said George Gero, vice president of global futures at RBC Capital Markets.  "There have been plenty of problems and we're going to return back to basics after the fiscal cliff," he said. "Sometime after January, people are going to take a second look at the world and say 'you know what, I do need someplace to put my money'."

(Sources: “Gold Edges Higher in Asia; Precious Metals Mixed in Cautious Trading,” Wall Street Journal, December 30, 2012; “Gold May Be Down but Bulls Aren't Counting It Out,” CNBC, December 29, 2012; “Could 'Cliff' Failure Boost Gold Prices?CNBC, December 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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