Gold is likely to rise to a new all-time as investors continue to safeguard their wealth in an environment of declining economic growth

The gold price surged higher Monday, rising $39.00 to $1,677 per ounce. Weakness in the U.S. dollar, spurred by healthier risk appetites amongst investors, propelled the price of gold. The euro rose against the greenback following a pledge this past weekend from French and German leaders to do whatever is necessary to prevent a banking crisis. S&P 500 stock futures climbed 15.40 to 1170.30, which crude oil rose 2.2% to $84.80 per barrel.

While the gold price has remained in a correction mode over the past month, many precious metals strategists see the yellow metal resuming its advance in the months ahead. The latest firm to raise its gold price forecast was Morgan Stanley, which predicted that gold will be the top-performing commodity in 2012.

The price of gold is likely to rise to a new all-time as investors continue to safeguard their wealth in an environment of declining economic growth, according to Morgan Stanley’s Hussein Allidina. The firm raised its 2012 gold price target by 35% to $2,200 per ounce, and said it could reach $2,464 in a “bull-case” scenario. As for silver, Morgan Stanley lifted its target to $50 per ounce.

“With macro headlines threatening demand across the complex, we have become more selective about commodity exposure,” Allidina contended. “Gold and silver are our top commodity picks heading into 2012.”

“Gold, and silver to a much lesser extent, are viewed as safe havens and stores of value as well as the closest thing to a global reserve currency,” he added. Gold “has been the most resilient in past recessions.”

Looking ahead to this week, there are several key economic reports likely to serve as catalysts for the gold price. The Fed minutes – a recap of the most recent FOMC meeting – will be released on Tuesday, followed by weekly jobless claims on Thursday. The week concludes with retail sales and University of Michigan Consumer Sentiment on Friday.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more