Tags: Gold | Bullish | metal | price

Poll: Gold Experts Turn Bullish for Fourth Quarter, 2013

Wednesday, 10 Oct 2012 10:36 AM

Gold analysts have turned increasingly bullish on the outlook for prices in the final quarter of 2012, unanimously expecting a record-high average, and further gains next year, a Reuters poll showed on Wednesday.

The world's major central banks this year have pledged to pump more cash into the financial markets to lower borrowing costs in an attempt to beat a slowing global economy.

Commitments in particular from the U.S. Federal Reserve to buy mortgage-backed bonds until job creation improves and from the European Central Bank to buy bonds of indebted euro zone nations that meet certain criteria have served to put gold on track for a thirteenth year of successive gains in 2013.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

A Reuters poll of 27 analysts offered a median average gold price forecast of $1,690.00 an ounce for 2012, up a touch from a forecast of $1,685.00 at the end of the second quarter and compared with the $1,765 estimated in January.

This would be the highest average gold price for any year on record, although it falls short of the actual all-time high of $1,920.30 struck in September 2011.

Gold is expected to average $1,785.00 an ounce for the final three months of this year, up from $1,750 forecast in June, before rising to average $1,853.75 next year.

Analysts previously forecast the gold price to rise to an average $1,791.25 an ounce in 2013.

"Gold is reasserting itself as a strong safe haven during the current period of risk and uncertainty. The European debt crisis remains a major issue...and other major indicators in the U.S. and abroad continue to illustrate just how feeble the economy remains," David Beahm, vice president, marketing and economic research, at Blanchard & Company, said.

"Many investors have moved into gold to protect and grow their wealth, and we foresee global investment demand for gold to grow even further than the 900 percent increase it has seen since 2007," Beahm added.

The appeal of the dollar as a safe-haven asset for investors seeking an alternative to the euro or higher-risk currencies acted as a headwind to the gold price in the first half of this year when the U.S. unit rose in value.

DOLLAR IMPACT

So far in the second half, the value of the dollar against a basket of currencies has fallen by 2.5 percent, while the value of gold has risen by nearly 11 percent.

Leading drivers are growing confidence that European leaders may be able to stem the spread of the debt crisis and mounting concern that U.S. fiscal imbalances may tip the world's largest economy into recession next year.

U.S. lawmakers have until January to agree on how to cut the full-year fiscal deficit, which stands at $1.09 trillion, before a series of tax increases and spending cuts worth a combined $600 billion take effect.

This fiscal cliff could provide fresh impetus for gold demand, especially if it undermines the dollar.

"Gold is likely to hold its relationship with the U.S. dollar — in 2012 we inversely saw rupee and euro weakness, which has translated into all time highs for gold in both of these currencies — this remains a drag on what might have been runaway gold prices," Ross Norman, chief executive of bullion dealer Sharps Pixley, said.

"The relationship will be put to the test when brinkmanship over the U.S. fiscal cliff emerges in the new year, which could easily propel gold back to all time highs above $1,922."

Another risk to gold, aside from a rise in the dollar, is continued softness in Indian consumption, which the government in the world's largest gold buyer has tempered this year with a series of import duties and tax rises, analysts said.

Silver, which is more dependent on the global economic cycle for demand from industrial sectors such as electronics or chemicals, could see investment retreat going into next year if growth continues to slow.

None of those polled expect the median silver price to surpass last year's average of $35 an ounce in 2012, but they are more optimistic about the metal's prospects for 2013 than they were three months ago.

The poll showed analysts expect an average silver price of $32.00 this year, rising to an average of $35.00 next year, compared with late June's estimates of an average price of $31.67 in 2012 and $32.75 in 2013.

"We see high volatility on silver prices coming back again, although we do not expect silver may outperform gold in long run. A possible supply surplus may cap silver prices in 2013," Andrea Aratoli, an analyst at Italpreziosi, said.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Markets
Gold analysts have turned increasingly bullish on the outlook for prices in the final quarter of 2012, unanimously expecting a record-high average, and further gains next year, a Reuters poll showed on Wednesday.
Gold,Bullish,metal,price
781
2012-36-10
Wednesday, 10 Oct 2012 10:36 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved