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Analysts See $2,000 Gold in 2013

Release Date: 
Wednesday, December 26, 2012

The price of gold rose today in the lightly traded market.  Gold was $4.80 higher at 7:27 a.m. Pacific Time on the New York Spot Market, trading at $1,664.10 per ounce.  Spot silver was 0.08 higher at $30.10 per ounce.  (Click here for the most current spot prices.)

TD Securities (TDS) said gold prices should reach a new record high in 2013. “Gold looks promising and the yellow metal will hit a peak of $2,000 an ounce before the end of next year,” TDS said.

TDS believes central banks will continue supporting gold.  “With Western central-bank stimulus, particularly the Fed, and stronger Chinese performance, the metals complex should move smartly higher, particularly precious metals,” TDS noted.  Inflation fears are likely to build as the Fed keeps building its balance sheet, enhancing gold’s role as a hedge against inflation, TDS said. The firm sees inflation as a growing risk if policy-setters wait too long to drain liquidity from the financial system.

Central banks are also expected to support gold is through official-sector buying, perhaps acquiring as much as 525 tons of gold next year, TDS estimated.

The Fed’s recent decision to ramp up QE “represented a major escalation in its monetization of debt and is likely to continue through 2013 and well beyond,” said Brien Lundin, editor of Gold Newsletter.  In Europe, “we should see the realization that very significant money printing will be necessary to address the union’s massive debt woes,” he said.  Gold may exceed $2,000 per ounce and silver may approach $40 per ounce next year, Lundin said.

Chris Mayer, managing editor of Agora Financial and editor of newsletter Capital & Crisis, agreed that gold can easily top $2,000 per ounce in 2013.

(Sources:  “Gold Futures Advance on Bets Japan to Increase Stimulus Measures,” Bloomberg, December 26 , 2012; “Gold rises as dollar slips; fiscal talks in focus,” Marketwatch, December 26 , 2012; “Gold, silver and oil markets hope for better year,” Marketwatch, December 21, 2012;  Gold prices dip sharply; but TDS still sees $2,000 Gold in 2013,” Commodity Online, December 19 , 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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