Range bound on gold for the near term between $1,600 – $1,800 per ounce

The gold price stabilized near $1,677 per ounce Tuesday amid a relatively quiet morning on Wall Street.  The gold price held in a tight range between $1,673 and $1,682 in overnight trading, Despite Monday’s move higher, the price of gold remains near the midpoint of the area it has occupied for the better part of this year. 

Jeff Wright, a managing director and senior research analyst at Global Hunter Securities, wrote in a note to clients that he sees the yellow metal continuing to consolidate in the near-term. “I still believe we are range bound on gold for the near term between $1,600 – $1,800 per ounce;” Wright stated, “and do not see this changing without further quantitative easing by the U.S. Federal Reserve, significant progress towards resolving European debt crisis or a collapse of the euro.”

In contrast to Global Hunter Securities, one firm that remained bullish on the gold price was Bank of America Merrill Lynch (BofA).  Yesterday, BofA metals strategist Michael Widmer reiterated his forecast for the price of gold to reach $2,000 per ounce in the next 12 months. In his report, the firm contended that “We believe the trajectory of U.S. gross domestic product growth (and linked to that, movements in Treasury yields) will be critical for gold prices. Our base case is that economic activity in the U.S. will slow from current levels, with the Fed likely announcing another round of quantitative easing in 2H2012, which would be bullish for gold.”

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