Tags: Dudas | gold | 2000 | 2013

Sterne Agee’s Dudas: Gold Might Hit $2,000 Next Year

By Dan Weil   |   Friday, 30 Nov 2012 09:32 AM

Gold should reach $1,850 an ounce by year-end, and $2,000 is “reasonable” for 2013, as the Federal Reserve continues its quantitative easing, says Michael Dudas, precious metals analyst at brokerage firm Sterne Agee.

The precious metal traded at $1,726 Thursday night. A gain to $2,000 from there would total 16 percent.

The Fed is likely to keep real interest rates negative into 2015, Dudas tells CNBC. “That’s going to be the key harbinger for gold.”

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The 10-year Treasury yield stood at 1.62 percent Thursday, well below the 2.2 percent inflation rate for the 12 months through October.

Even a plunge over the fiscal cliff — $607 billion of tax hikes and spending cuts that will begin Jan. 1 without government action — wouldn’t hold gold back, Dudas says.

“If we go off the cliff, the Fed will be there flooding more dollars into the market place. … People will be picking up gold in that type of environment.”

Some experts believe the metal will trade in a narrow band until the fiscal cliff issue is settled.

"Gold is back in its old $1,700-$1,730 range," Chen Min, an analyst at Jinrui Futures in Shenzhen, China, tells Reuters.

"On the macro side, the market sees very little direction, while the fiscal cliff talk poses much uncertainty and risk."

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