Gold, copper, silver, platinum and palladium will outperform other commodities next year on easing by the U.S. Federal Reserve and supply constraints, according to Bank of America Corp. ...
"We expect large-scale policy easing by the Fed and the ECB should push gold prices higher," the analysts wrote, forecasting gold prices at $2,000 an ounce for 2013 and $2,400 for the end of 2014. "A stronger Chinese economy will likely lend support to supply constrained metals next year, and we expect copper prices to average $7,750 a ton in the fourth quarter of 2013."
The bank also sees a strong support level under gold because of emerging-market demand:
Our analysis shows that investors will have to buy significant amounts of gold to push prices above $2,000/oz this year. However, with emerging markets getting richer, their budget allocation to non-essential items such as gold will likely increase in the long-run. This means that the marginal importance of investors could start to decline in the longer term, likely supporting a gold price floor above $1,500/oz over the next decade. In any case, a firm recovery in the US and global economies will remain the greatest risk to gold prices over this new phase of QE3, as a rapid and disorderly unwind of this monetary easing cycle would likely drive investors out of gold, in our view.
"We expect large-scale policy easing by the Fed and the ECB should push gold prices higher," the analysts wrote, forecasting gold prices at $2,000 an ounce for 2013 and $2,400 for the end of 2014. "A stronger Chinese economy will likely lend support to supply constrained metals next year, and we expect copper prices to average $7,750 a ton in the fourth quarter of 2013."
The bank also sees a strong support level under gold because of emerging-market demand:
Our analysis shows that investors will have to buy significant amounts of gold to push prices above $2,000/oz this year. However, with emerging markets getting richer, their budget allocation to non-essential items such as gold will likely increase in the long-run. This means that the marginal importance of investors could start to decline in the longer term, likely supporting a gold price floor above $1,500/oz over the next decade. In any case, a firm recovery in the US and global economies will remain the greatest risk to gold prices over this new phase of QE3, as a rapid and disorderly unwind of this monetary easing cycle would likely drive investors out of gold, in our view.
More information can be found online at http://www.goldbullionadvisors.com
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