NEW YORK (Commodity Online): Gold prices will see some explosive moves in 2012, UBS reports even though the current nature of gold proves to be a difficult hurdle for short-term trade.
“Our recent meetings suggest clients would prefer for gold to move more convincingly back into the safe-haven camp as its current hybrid state makes it a difficult short-term trade”, the bank report states while adding that gold may be basing itself for "potentially explosive moves" in 2012
“Clearly there are several unknowns, but if the Euro zone moves towards fiscal integration at a much faster pace then previously thought possible, we think there could be a sizeable gold reaction over the weeks and months ahead, particularly if the market starts to believe that Euro bonds will be the likely endgame. The process involved, essentially printing money to buy bonds, would probably equate to the largest bullish ingredient for gold since QE2 was launched by the Federal Reserve”, the report adds.
Goldman Sachs had earlier reiterated its long position on gold by saying that “with our U.S. economics team now forecasting slower U.S. economic growth in 2011 and 2012, we expect U.S. real interest rates to remain lower for longer, supporting higher gold prices through 2012”
