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BNP Paribas continue to believe that the direction of the gold price will be tightly linked to monetary easing. In the next 12 months, they expect gold to trend higher.

08 Oct 2012

NEW YORK (Commodity Online): BNP Paribas things gold prices may wait till second quarter of 2013 to break $1900 an ounce level.

It looks for gold to average $1,795 per ounce in the fourth quarter of this year and $1,865 in the first quarter of 2013 and $1,900 in the second, says BNP Paribas in an updated forecast.

The French bank looks for gold to continue working its way high over the next year, with monetary policy likely to be the key influence. Prices rose sharply since mid-August on expectations for more Federal Open Market Committee easing followed by actual accommodation.

“The FOMC commitment to open-ended quantitative easing is taking it one step further than previous instances of QE, as there is no timeline for the end of bond buying. This is most definitely positive for gold. On the other hand, inflationary pressures have subsided, particularly in China, and should have less sway on gold prices,” says Anne-Laure Tremblay, senior precious metals strategist at BNP Paribas.

“We continue to believe that the direction of the gold price will be tightly linked to monetary easing. In the next 12 months, we expect gold to trend higher. The outlook beyond this timeframe will greatly depend on economic conditions, and particularly on any improvement in the U.S. job market,” BNP Paribas concluded.


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