Monday, December 5, 2011

Major institution’s 2012 Gold Price Predictions

Many of the world’s major financial institutions are now calling for the price of gold to reach $2,000 an ounce and higher in 2012.

Barclays Capital
“We expect prices to average $1,875 per ounce in the fourth quarter 2011 and $2,000 per ounce on an annual average basis in 2012 as the macro insecurity persists, investor appetite remains positive and central banks are set to remain net buyers while the physical market continues to provide support at increasingly higher levels,” said Barclays Capital analyst, Suki Cooper.

If sovereign debt woes explode, gold may “briefly spike” to between $2,000 and $2,500 an ounce over the next year, remaining above an average $1,200 in the long-term, said Citigroup Inc.

“I believe gold will still be a very heavily demanded safe-haven trade,” says Axel Rudolph, Commerzbank technical strategist, who believes gold may reach $2,000 in October on “another crisis.”

According to the most recent Thomson Reuters GFMS Gold Survey 2011 update, gold could “easily” reach above $2,000 an ounce by the end of this year on continuing sovereign debt concerns and volatility in the currency markets. “We expect a major increase in world investment in the second half of this year.”

HSBC is forecasting a gold price of $2,025 an ounce for 2012 and $1,850 an ounce for 2013. “We believe gold’s 10-year bull market remains firmly intact, despite high volatility, with prices up 29 percent already this year,” said the global banking and financial services company. “The euro zone debt crisis, currency wars, and deep uncertainty among investors are among the factors driving prices higher.”

Morgan Stanley
According to Morgan Stanley analysts, gold has about an 85 percent chance of trading between $1,819 an ounce and $2,085 an ounce in 2012.

Societe Generale
“We expect investor momentum to take gold through $2,000 an ounce before the end of 2011,” says Societe Generale. The bank sees the price of gold reaching $2,275 an ounce in 2012. “The gold market is underpinned by the ‘grass roots’ demand and this appears to be remarkably resilient.”

TD Securities
TD Securities expects gold “to hit highs of well above $2,000/oz. in the coming months on lower bond yields, expectations of poor risky assets returns and general risk aversion owing to uncertain global economic conditions.” Its gold forecast puts the yellow metal at $1,975 in 2012 and $1,750 in 2013.

“Our expectations for gold in 2012 and beyond are governed to a large extent by our expectations for US interest rates and the health of the global economy,” said UBS, which has pinned its 2012 average gold price at $2,075 an ounce with a forecast of $1,725 for 2013.

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