This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Settle Higher on Greek Debt Deal (Update 3)

Rick Trotman, senior research analyst at MLV & Co., thinks that gold prices will do fine this year. "I don't expect a blockbuster year but ending the year between $1,700-$1,800 an ounce is realistic." Trotman does think that if Greece secures its second bailout and nails down a debt deal it would really depend on how good or bad that deal is. "If everyone is really happy with it, gold could trade down," he says, "but if it looks good then Portugal will decide to step up to the plate as well hoping to get a really good deal and gold would trade up on that."

Trotman also says gold will start looking to the U.S. presidential elections in November. Trotman suggests that if the polls keep leaning towards President Obama that that would be good for gold as "Democrats would spend a lot of money," as the dollar is devalued gold rises in response. "A Republican President would be bad for the price of gold," asserts Trotman.

James Steel, analyst at HSBC in a recent 2012 gold outlook report says that it's not just the U.S. going through an election cycle. "The political process will result in the election or selection of a hose of leaders in countries that represent more than 50% of the world's GDP." The political upheaval ranges from the U.S. to France to Egypt to Russia. "Uncertainty about changes in government may boost safe-haven demand for gold, in our view."

Another wild card playing out for gold Thursday was the news that inflation in China rose to a three month high at 4.5%. The higher reading is good for gold as it might push consumers into buying the precious metal as a safer place to invest as real interest rates are a negative 1%. However, the higher reading might also confirm the central bank's reluctance to lower interest rates, to firmly commit to a loose monetary policy.

China has been pushing its banks to lend more into order to avoid a hard landing, or strong slowing of growth. M2 supply in the country, cash in circulation plus savings, checking and any travelers checks, grew 13.6% at the end of 2011 to 85.16 trillion yuan. This trend will need to continue to support strong gold buying. The country imported 427 tons of gold in 2011 and consumed 787 tons.

Gold mining stocks were mixed Thursday. Kinross Gold (KGC - Get Report) was flat at $11.08 while Randgold Resources (GOLD - Get Report) was 0.41% higher at $115.03.

Other gold stocks, Agnico-Eagle (AEM - Get Report) and Eldorado Gold (EGO - Get Report) were trading mixed at $35.07 and $13.96 respectively. .

Occupy Wall Street - Top Videos of 2011

-- Written by Alix Steel in New York.

>To contact the writer of this article, click here: Alix Steel.

Related Articles:

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AEM $28.00 13.00%
EGO $3.39 11.15%
GOLD $63.35 0.00%
KGC $1.83 0.00%
TSLA $247.93 3.40%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs