News Header

 

Gold Gains 6.6% in First Quarter

Release Date: 
Monday, April 2, 2012

Gold moved higher today following a positive manufacturing survey from the Institute for Supply Management and portfolio adjustments by money managers for the new quarter. Longer term, analysts expect an upward trend in gold prices due to factors including slowing U.S. economic growth and central bank liquidity. Gold traded at $1680.60 per ounce at 7:18 a.m. Pacific Time on the New York Spot Market with silver at $33.06 per ounce.

"Money is coming into gold and [the] metals complex in anticipation of the next quarter asset allocations," said George Gero, a precious metals strategist at RBC Capital Markets.

Euro-zone finance ministers added more than 700 billion euros ($934 billion) in liquidity to the region's debt rescue fund, punctuating a persistent trend of loose monetary policy from the world's central banks.

Gold prices rose 6.6% during the first quarter of 2012. Looking ahead, continued high levels of liquidity in the markets may support the precious metal. "We think that actually gold will tend to rally in the months ahead on the back of a wider improvement in liquidity which we're seeing across the macrospace," said Standard Chartered analyst Daniel Smith.

Commerzbank analyst Eugen Weinberg said that "in the longer term, we still stay very confident that the upward trend in gold is still very constructive."

Bank of America Merrill Lynch said that "U.S. growth is set to slow in (the second quarter). A cyclical slowdown is typically supportive to gold prices for a host of reasons, including a reduction in the upside to prices of cyclical asset classes," the bank noted in a report. "The impact of a renewed slowdown in U.S. growth on gold prices may be even more pronounced this time around because discussions around QE3 will in all likelihood re-emerge, as the Fed may not stand by idle as activity slows."

(Source: "Gold turns higher; copper adds to gains," MarketWatch, April 2, 2012; "Gold Pushes Higher with Oil, Stocks on Data," CNBC, April 2, 2012,";"PRECIOUS-Gold prices ease as equities, oil retreat," Reuters, April 2, 2012; "Gold Closes Quarter With 6.6% Gain," Wall Street Journal, March 30, 2012)

News Footer

 

†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.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage.

To receive free information package on gold and precious metals investing, call Goldline at 1-800-963-9798.