Gold Bullishness Toned Down In 2013?
“[W]e are confident that the gold price will achieve — and indeed exceed, at least temporarily — the $2,000 per troy ounce mark,” said Commerzbank, which predicts an average price of $1,950, in a report. The firm sees headwinds in the market diminishing and also believes Indian demand will rebound this year.
However, the prevalence of lower expectations for gold in 2013 cannot be ignored.
“The very poor price action of gold recently and the lack of bullish triggers leads us to moderate our expectations for gold and silver prices,” said Societe Generale, according to Kitco.
The bank remains “moderately bullish,” but it is amongst a growing crowd of lowered forecasts. Instead of $1,800, the firm projects gold will average $1,700 this year.HSBC, citing the likelihood of a wide and volatile trading range, also lowered its average price by nearly $100, from $1,850 to $1,760. CPM Group made a rather modest projection of $1,666 for 2013. “A lot of what gold investors cite as reasons for gold to go up, we think is already baked into the price," Rohit Savant, a senior analyst at the firm, told Kitco. “If you look at inflation, the gold price is reflecting that and much more,” he added. Further, some foresee factors that were once considered drivers for the market acting more as support for prices this year. For example, much attention is being paid to the fact that central banks have converted from net sellers to net buyers. Central banks are now consuming 10 to 15 percent of the annual gold supply, according to Nicholas Brooks, head of research and investment strategy at ETF Securities. Positive buying trends are expected to continue in 2013, especially among emerging nations, but Brooks warned that this does not mean prices will rise nor does it prevent prices from falling.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV