A continuation of the US government's money-printing program, euphemistically known as quantitative easing, will push the gold price to new highs this year, according to the latest gold survey by Thomson Reuters GFMS.
GFMS, which presented its findings in Toronto on Wednesday, also said gold production will have a "stronger tone" in 2013, with expected gains of 1.25 percent, or 35 more tonnes than in 2012, Proactive Investors reported.
Philip Klapwijk, global head of metals analytics for GFMS, told Mineweb that the backtrack in the gold price that occurred in 2012 is an aberration, and 2013 will be a banner year for the metal due mostly to continued loose monetary policy in the United States and central banks' ongoing interest in buying gold.
“It may be that 2012 turns out to be the pause that refreshes — the 6% rise in annual average prices is still not that bad [but]... we still think that the outlook is pretty positive for 2013 given the expected economic and financial backdrop this year which should support a high if not higher level of investor and also in fact central bank interest on the buy-side in gold," Klapwijk told Mineweb's Geoff Candy.He went on to say that a recent US Federal Reserve statement, which indicates that the central bank may end QE3 by the end of the year, has "been completely misinterpreted," meaning there will likely be no cessation to the cycles of quantitative easing, which since 2008 have been a boon for gold and other precious metals. Earlier this month Gold Investing News reported that gold bulls could be disappointed in 2013 based on predictions by certain banks, including Societe General, which predicts gold will average $1,700 this year; HSBC, which lowered its price by nearly $100 to $1,760, and CPM Group, which has a lowball estimate of $1,666. These bearish predictions compare to bulls like Morgan Stanley, which predicts that gold will average $1,853 in 2013, and Commerzbank, which has gold cresting to $1,950 on average.