News Header

 

Gold Gains Seven Percent in 2012

Release Date: 
Wednesday, January 2, 2013

Building on its seven percent gain in 2012, the price of gold rose today reaching a two-week high after Congress passed legislation to avoid the fiscal cliff.  Gold was $11.70 higher at  11:25 a.m. Pacific Time on the New York Spot Market, trading at $1,687.90 per ounce.  Spot silver was  0.66 higher at $31.11 per ounce.  (Click here for the most current spot prices.)

“Markets reacted positively to news that a deal of sorts has been reached,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., said in an e-mail. “The drop in the dollar is also providing a boost to the commodity complex.”

According to Nataxis analyst Nic Brown, "gold will be benefiting from an anticipation that the dollar will weaken.”

"Whatever happens in Washington, we suspect gold will likely do better over the next few weeks as the colossal failure of political will to get America's fiscal house in order should provide fodder for the gold bugs to bid prices higher," said Edward Meir, metals analyst at brokerage INTL FCStone.

"In the case of gold, we still target the level of $1,950 an ounce over the next three months,” UBS said in its 2013 outlook report.  During the first quarter of 2013, economic uncertainty “warrants a defensive posture… We therefore think gold and platinum are an outright buy at present levels as both metals have very low supply elasticity and are key beneficiaries of loose monetary policy.”

Andrew Su, CEO of Compass Global Markets, said, “we still think gold will be headed toward new record highs in the first and second quarters of next year,” at about the $1,900 per ounce level. “I think gold will approach $2,000 in the next six months,” he said.

Mr. Su sees investors fleeing from risk assets and predicts central banks, including the Federal Reserve, will be required to provide further fiscal stimulus.  “I think precious metals will outperform.  I think every other market is in for significant falls this year….”

(Sources:  “Gold Reaches Two-Week High as Commodities Gain on Budget,” Bloomberg, January 2, 2013; PRECIOUS-Gold regains strength, U.S. fiscal crisis ends,” Reuters, January 2, 2013; “PRECIOUS-Gold hits two-week peak after U.S. budget deal,” Reuters, January 2, 2013; “Precious Metals to Outperform in 2013CNBC, January 1, 2013)

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.