Market analysts are cautiously optimistic about the direction of the price of gold in 2013. Gold can hit $2,000 per ounce next year or before the end of 2012 if central banks announce stimulus in order to sustain the economic recovery. However, the outlook for gold in 2013 is less bullish.
- Additional Reading: Optimism outweighs fears of Fiscal Cliff
London Bullion Market Association conference took place this week. About 700 delegates attended the meeting. They project rise in the gold price up to $1,849 per ounce till the next conference in September 2013, if not earlier. This forecast implies a 7 % rise to the current prices of $1,729 per ounce.
During the last 2011 LBMA conference, a similar prediction was made. The delegates – the most powerful investors and traders in gold industry predicted that the metal would be trading at $2,019 per ounce. This forecast was announced in September 2011, few weeks after the gold reached a record of $1,920. Although, through this year price varied from $1,530 to $1,800 per ounce, the results missed the forecast so far.
The predicted advance to $2,000 per barrel sounds a bit hesitant. The delegates explained that after the conference they share less optimistic view on the previous forecast of gold price at $1,914 per ounce. The result of a mass survey conducted during the conference showed that the yellow metal’s price is expected to be around $1,849 per ounce till the next LBMA. That is a realistic view on the issue.
According to Raymond Key, head of gold trading department at Deutsche Bank AG, gold will hit $2,000 and even higher. That is most likely to happen if the money printing continues.
Elsewhere, the US Federal Bank said that it will hold interest rates mortgage debt around zero until the end of 2014. The Federal Reserve will buy $40 billion worth of debt a month during that period in order to support the economic growth and to cut down unemployment.
The gold price did not benefit much from the re-election of Barack Obama as US president, despite the initial rebound. Now, the US Federal Reserve’s loose monetary policy program is likely to continue.
The uncertainty surrounding global economy, and respectively the gold price, suppressed China’s enthusiasm towards the precious metal. The Chinese market has a good perspective for growth in respond to the great demand of the large-scale industry. Increasing income, maturing and expanding market, steady economic growth, along with the launch of new products, will boost the Chinese gold market, according to Mr. Zheng, general manager of precious metals department at the Industrial and Commercial Bank of China.
This year Russia, Brazil, and South Korea added a good amount of gold to their reserves. The macroeconomic environment in combination with central banks gold buying suggest the demand will remain reasonable.
- Additional reading: Global gold demand 14% lower so far in 2012
Suppliers won’t answer to the high demand of banks and industry, so it’s possible the gold prices to continue advancing. Yet, how much, it is not certain.
Resources for gold investors:
- Top Rated Books for Silver Traders Review
- Top Rated Books for Gold Traders Review
- Social Media for Stock Market Traders
