Gold Forecasters Splitting on Peak for Bull Market: Commodities – Bloomberg 01-14-13

Salient to Investors:

Christin Tuxen at Danske Bank predicts gold will average $1,720 an ounce in 2013 as central-bank stimulus will sustain buying as a hedge against inflation and currency devaluation, and $1,600 in 2014 as economic growth curbs demand. Tuxen said the prospect of the Fed stopping easing and improving economic activity will start being priced into gold prices in half2 2013.

Tom Kendall at Credit Suisse predicts $1,740 as central-bank stimulus will sustain buying as a hedge against inflation and currency devaluation, and $1,720 in 2014 as economic growth curbs demand.  Kendall said gold will still have a very solid role in a diversified portfolio as more shorter-term speculators gradually drift away from gold.

Jochen Hitzfeld at  UniCredit predicts $1,700 in 2013 as central-bank stimulus will sustain buying as a hedge against inflation and currency devaluation and and $1,800 in 2014 as record- low interest rates maintain gold’s allure.  Hitzfeld said the most important factor is negative real interest rates but we see no end in sight there for the next couple of years.

Donald Selkin at National Securities Corp says gold will definitely continue to rise but the euphoria has subsided and gold will take a breather in 2013.

Investors have built a hoard bigger than the official reserves of all but two nations.

The top 6 gold and precious-metals analysts are bullish for 2013, with a median forecast for $1,997.50 by December.

There are no signs that the biggest investors are selling bullion. Soros Fund Management raised its stake in the SPDR Gold Trust by 49 percent in Q3.  Paulson & Co. remained the biggest shareholder with a stake valued at $3.52 billion.

Only the U.S. and Germany hold more gold in official reserves than global ETP holdings.

Michael Shaoul at Marketfield Asset Mgmt said six months of good US economic data and Europe’ s surprisingly quick healing is putting the long-term gold rally under more pressure. Economists expect the US to accelerate from Q2 through the end of 2013.

Morgan Stanley cut its forecast for this year to $1,853, from $2,175 in May, and Deutsche Bank and BNP Paribas reduced their 2013 outlook by at least 12 percent since last year. JPMorgan Chase ended its buy recommendation. Goldman Sachs expects a 2014 average of $1,750.

Hedge funds have cut bets by 54 percent since October.

The 1980 peak of $850 adjusted for inflation is equal to $2,398.

19 of 23 analysts and traders surveyed by the London Bullion Market Association expect record average prices in 2013 and a high of $1,914.

Barclays said governments and central banks will buy 300 tons in 2013 and  again in 2014.

Peter Sorrentino at Huntington Asset Advisors is bullish because of the money from all of the easing and the depreciation and loss of purchasing power continues to manifest itself.

Read the full article at http://www.bloomberg.com/news/2013-01-15/gold-forecasters-splitting-on-peak-for-bull-market-commodities.html.

Free email alerts of articles as soon as they are posted.