Gold Core
Bullion banks remain positive on gold for 2012 with major banks predicting an average gold price of between 13% and 28% above today’s spot at $1,595/oz. It will be interesting to see if these forecasts get as much international media coverage as the poll of 20 hedge fund managers has.
UBS have reiterated their bullish outlook for gold and believe gold will average $2,050/oz in 2012. This is 28% above today’s spot price of $1595/oz.
Goldman Sachs said overnight that gold will average $1,810/oz in 2012 – which is 13% above today’s spot price.
Barclays Capital have said this morning that gold will average $2,000/oz in 2012 – which is 25% above today’s spot price.
Gold will move higher due to “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying. Given the risks posed to the Eurozone and indeed the UK, gold priced in sterling and euros should experience similar gains - if not more.
The ECB’s Draghi’s warning regarding a Eurozone break up, currency devaluations and the risk of a “big inflation” is a reminder that the price of gold should be considered not solely in dollar terms but also in other currencies –especially were the European single currency to become less single.
Rehypothecation and the serious risks that a massive period of deleveraging poses to the global financial and economic system is likely to be a very important factor in 2012 which will lead to heightened volatility but is another positive for gold prices in the long term.
Source: goldcore
