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GFMS Says Gold May Reach $2000/oz in 2012

Release Date: 
Thursday, March 22, 2012

Gold was lower along with equities and commodities following disappointing manufacturing data from China and Europe. Gold was trading at $1636.80 per ounce at 7:49 a.m. Pacific Time on the New York Spot Market with silver at $31.60 per ounce.

China's manufacturing activity contracted during March for a fifth straight month. The overall rate of contraction accelerated with new orders at a four-month low. China's manufacturing sector consumes a large amount of natural resources. As such, slowing growth tends to exert downward pressure on commodities.

Philip Klapwijk, Global Head of Metals Analytics for Thomson Reuters GFMS, believes gold may peak at $2,000 per ounce in 2012 and average $1,800 per ounce. With current or increased levels of investment demand, prices have the support to move higher, he indicated.

(Source: "Gold futures lower in wake of China data," MarketWatch, March 22, 2012; "PRECIOUS-Gold sluggish after China factory activity falls," Reuters, March 22, 2012; "PRECIOUS-Gold hits lowest since mid-Jan, investors back off," Reuters, March 22, 2012; "Gold to average $1800 this year despite big supply surplus – GFMS,"MineWeb, March 20, 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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