February 21st, 2011
In our 2010 outlook, most big brokerage houses predicted gold would rise anywhere from 5-30% and finish 2010 in the range of $1150 – $1500. Goldman Sachs 2011 prediction was within 5% of the actual price per ounce of gold which ended 2010 around $1400 USD. To recap the 2010 predictions before we move on to 2011..
- Morgan Stanley forecast a base price of $1,200 for gold in 2010 with peaks above $1300.
- Macquarie (largest investment bank in Australia) raised their forecast for gold to $1150 per ounce in 2010 (Dec 09)
- Goldman Sachs announced on December 3rd that it has lifted its 12-month gold price outlook to $1350 per ounce from a previous estimate of $950 (Dec 09)
- Merrill Lynch sees gold at $960 an ounce in 2009 as a whole, rising to $1500 in the next 18 months
In 2011, the bullish view continues, Most firms believe that macroeconomic conditions such as rising global debt and upward pressure on inflation will cause gold to push higher to new all time highs.
- Goldman believes low U.S. interest rates will continue to underpin the rally in commodities like gold. The firm expects the precious metal futures to climb to $1,690/oz by the end of 2011 and continue to move higher.
- Merrill Lynch predict Gold remains in a secular bull market with projected resistances at $1500-1600/oz and then in the $2000-2300 area. We have raised our long-term targets to $2000 -3000. Major support is $1265 to $1160.
- Morgan Stanley has raised their 2011 gold price forecast in their base case by 14.3%, to an average US$1,315/oz, and in their bull case, which anticipates a more aggressive level of dollar weakness and a protracted period of negative real interest rates, Morgan Stanley has raised their price forecast to USD $1,512/oz from US$1,380/oz.
- Barclays Capital’s MD Paul Horsnell predicts that the gold price is likely to reach $1,850/oz by the end of 2011 due to strong demand from emerging markets and limited supply.
We agree with Barclay’s and Goldman and predict that gold will hit the upper end of the range around $1700-1750 by the end of 2011. Unrest in the Mideast , Inflationary pressures both domestically and abroad as well as a rising debt load will provide support to gold prices in 2011. Look for our upcoming article on the best takeover targets in 2011. Subscribe to our email list to get the scoop to moment it hits the press!
Popularity: 100% [?]
May 12th, 2010
With the Euro debt crisis not leaving the headlines and volatility gripping the markets, the flight to gold has become even more pronounced over the last week. GLD pushed through technical resistance at the previous 52 week high around $120 earlier this week and hit a high of $122.24 today. If the volatility continues, Gold could see larger swings in the 2-5% per day range as world markets struggle to put a value on the safety currency. Gold and silver stocks , especially the smaller miners such as Hecla also have benefited and have seen 10%-20% gains in little under a week. Technically gold is overbought at the moment and is high than 50, & 200 moving averages and is at the upper ceiling of its Bollinger Bands. That being said, once a stock or commodity breaks through a 52 week high, it could be a few days or even weeks until technical come back into focus.
Popularity: 51% [?]
March 13th, 2010
After topping $110 earlier in the week, GLD receded quickly and ended the week around $108 in cautious trading. An recent acceleration in Chinese inflation sparked worries that the country may tighten monetary policy to curb the trend. US Retail Sales also came in stronger than expected which put gold under pressure.
Regarding Gold In supply news, South Africa’s statistics service said the country’s gold output fell a full 18.2 percent year-on-year in January. The republic was the world’s second largest gold miner last year behind China, according to the World Gold Council. The chief executive of the world’s number three gold miner, Anglogold Ashanti said on Monday the company viewed price dips below $1,100 an ounce as an opportunity to accelerate buybacks of its outstanding hedged positions which bolsters their overall strategy that predicts long term gold prices above $1000 per ounce. Anglogold Ashanti is not the only large miner to start removing hedges, a full 70% of large miners are looking at significantly reducing gold hedges. Richard O’Brien, CEO of No. 2 Newmont Mining Corp (NEM.N), said he expects inflation will wreak havoc as central banks around the world continue to use stimulus programs to spur economic recovery. In a recent summit he stated the following:
“My view is that each country in the world, to some extent, has fueled the reigniting of its economy through issuance of additional currencies, The long-term impact of all the stimulus programs that we have seen in the U.S. and in European countries is going to come home to roost.”
If we look at a short term chart of gold we see that gold is near a critical support area. If it breaks current levels the next support point is $106.88 and then the 200 day MA just above $102. If it holds at current levels, it could rise toward $111.70 which represents the upper Bollinger Band
Popularity: 58% [?]