Still Favouring a Decent Outlook for Gold in 2013
On Wednesday, the U.S. Comex gold futures gapped down $25 upon open and
traded as low as $1,705.50. The gold futures retraced almost half of
the losses and rose 0.62 percent to $1,727.20 on Thursday. Week-to-date
the gold futures fell 1.38 percent. Some large speculators may be
betting on a resolution of the U.S. fiscal cliff soon as well as a
faster pace of economic recovery in the U.S. versus other parts of the
world, thus boosting the attractiveness of the U.S. dollar. In the past
two days, the S&P500 index rebounded 1.22 percent while the Euro
Stoxx 50 index rose 1.50 percent, both reflecting optimism towards the
U.S. budget negotiations. The Dollar Index is at 80.204 on Thursday and
is flat for the week.
A Global Investor Poll Favours the U.S. over Europe
The New York Fed President said on Thursday that the Fed will continue
to be accommodative until it sees a sustained improvement in the
economic growth and labour market outlook. He also believes that the
U.S. fiscal sustainability is a matter of political will and not an
economic question. A recent Bloomberg global poll of 862 investors
shows that over 66 percent of investors believe in a stabilizing or
improving global economy compared to a little over 50 percent in
September. The investors like the U.S. equity market the best next year.
Confidence in the U.S. is also rising while pending home sales
rebounded 5.2 percent in October. Household purchases however grew only
1.4 percent in Q3 while the U.S. real GDP grew 2.7 percent. The
Euro-area economic sentiment index rose 1.4 points to 85.7 in November
although there is a worry that Germany may slip into a recession.
Investors in the global poll think that the EU stock returns will be the
worst in 2013. More fund inflow into the U.S. could boost the demand
for the U.S. dollar, hurting gold prices.
Decent Outlook for 2013’s Gold Price
Analysts’ median forecast for 2013 year-end gold price has risen from
$1,832 as of end-September to $1,850 currently. This is about 7 percent
higher than the current level. Commerzbank expects gold to reach
$2,000/oz next year, citing supporting factors such as: more central
banks buying gold due to their continued ultra-loose monetary policy or
addition to reserves, more active Indian buyers, continued low real
interest rates, rebound in Chinese growth rate and expected deficits in
gold supply to continue into 2013.
What to Watch
Lots of manufacturing data to watch next week: China’s November HSBC
manufacturing PMI on 2 December, the U.S. November ISM manufacturing
index on 3 December and the November Euro zone PMI on 5 December.
Austin Kiddle
Sharps Pixley, London
www.SharpsPixley.com
30 Nov 2012 | Categories: Gold
