Tags: gold | silver | equities | Ukraine

Gold Average Price Seen Falling in '14 by CPM as Investment Ebbs

Tuesday, 25 March 2014 04:25 PM

Gold prices on average may fall for the second straight year as some investors shift to stock and property markets, according to CPM Group.

The metal may average $1,332 an ounce in 2014, Jeffrey Christian, CPM managing director, said today in an interview before the release of the research company’s “Gold Yearbook.” That’s down 5.4 percent from the average $1,408.83 in Comex futures in 2013.

“The price sensitivity among longer-term investors, renewed strength in equity and real-estate markets and weak demand from some major gold-consuming nations could deflate the price of gold and drive away shorter-term gold investors,” CPM, based in New York, said today in a statement.

In 2013, gold tumbled 28 percent, the most since 1981, as U.S. equities rallied to a record and inflation remained muted This year, the price has climbed 9.1 percent as the global economy faltered and tensions escalated in Ukraine. The metal dropped 3.1 percent last week after Federal Reserve Chair Janet Yellen said U.S. monetary stimulus may end this year with interest rates starting to rise in early 2015.

The 2013 slump halted a 12-year rally and a sixfold price increase. Gold surged to a record $1,923.70 in September 2011 as global interest rates remained low, while the U.S., Europe and Japan expanded monetary stimulus.

Central Banks

Last year, investors bought 30.9 million ounces of gold, down 18 percent from 2012, partly as central banks and government institutions slowed the pace of purchases, CPM said. Demand will drop 9.5 million ounces in 2014 “as the tug of war between short- and long-term investors is expected to weigh on overall net additions,” according to the statement.

Newly refined supplies, which included metal from mines and recycled gold, may drop 0.2 percent to 123.2 million ounces this year, CPM said.

Last year, supplies dropped 5.7 percent as recycled sales tumbled 17 percent, while mine output rose 0.6 percent.

A jump in jewelry sales boosted fabrication demand by 11 percent to 92 million ounces in 2013, the biggest increase since 1989, CPM said.

Fabrication may climb 4.7 percent this year, according to CPM.

The company has written annual reports on gold and silver since 1971.

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Gold prices on average may fall for the second straight year as some investors shift to stock and property markets, according to CPM Group.
Tuesday, 25 March 2014 04:25 PM
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