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Analysts Say Gold May Rise to $1,800 in Favorable Climate

Release Date: 
Wednesday, August 29, 2012

The price of gold was slightly higher as markets await Fed statements from the Jackson Hole, Wyoming conference beginning Friday. Gold was $1.20 higher at 6:10 a.m. Pacific Time on the New York Spot Market, trading at $1,668.890 per ounce. Spot silver was $.04 higher, trading at $31.04 per ounce. (Click here for the most current spot prices.)

"We (think) that we will see a fairly dovish Bernanke on Friday and that he will commit, if not at Jackson Hole then at the September FOMC meeting, to deliver more easing to the market," Danske Bank analyst Christen Tuxen said. "That's a very favorable environment for gold, and that means that in the next three months at least, there should be some upside…there is potential for closing in on the $1,800 level within the next three months."

"The move higher in gold in the past couple of weeks has been very strong and impressive, and reminds one of the moves gold made in years like 2010 when it gained 28%," said Chuck Butler, president of EverBank world markets

Torsten Dennin, Commodity Fund Manager, VCH Investments, said that increased demand for physical gold in India will support the precious metal in Q3 and Q4. Seasonal patterns suggest there will be increased demand in the second half after a soft Q2. Mr. Dennin also said that central bank buying is supporting gold while news surrounding the upcoming U.S. fiscal cliff issue will be positive for gold. He expects that gold may rise to $1,800 per ounce by the end of 2012.

(Sources:  “PRECIOUS-Gold dips below $1,665/oz ahead of Jackson Hole meet,” Reuters, August 29, 2012; “Gold Declines After Jump To Four-Month High Spurs Sales,” Bloomberg, August 29, 2012; “Gold Prices Fall, Investors Await Jackson Hole,” The Street, August 28, 2012; “Gold Price Being Driven by Investment Money,” CNBC, August 27, 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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