Last Updated : 17 October 2012 at 20:35 IST
HSBC still bullish on Gold sees $1,900/oz by year end
Source :Commodity Online
NEW YORK (Commodity Online): HSBC Holdings plc (HSBC) remains bullish on gold, and they expect yellow metalprices to reach $1,900 an ounce by year-end.
According to the British bank, Federal Reserve’s third round of asset purchases via quantitative easing (QE3) and other central banks’ policy easing measures are measurably boosting gold-investment demand.
“For investors who expect QE3 will fail to jump-start economic growth, gold offers an attractive quality asset. For investors concerned about the inflationary impact of QE3, gold appeals as an inflation hedge,” HSBC said in an updated forecast.
“Although the first rush of QE3-inspired gold buying is over, we believe that the Fed’s open-ended commitment to easing until U.S. labor markets improve will support gold well into 2013,” they added.
“Perhaps the most important plank in our bullish analysis is the likelihood that the U.S. dollar will weaken, as forecast by HSBC foreign-exchange research, due in part to the currency impact of QE3 and U.S. fiscal issues. Other macroeconomic factors, such as persistently high commodity prices, should provide a further prop for gold,” the bank continued.
Concerns about US fiscal issues and the likelihood of a weaker US dollar are additional factors supporting gold. It also cited continuing central-bank demand that accounted for 456 metric tons in 2011.
HSBC said it looks for reserve managers to purchase an additional 450 tons this year and 425 tons next year.
There are some sluggish supply/demand factors, including weak jewelry demand, low Indian bullion imports, rising scrap supply and limited retail coin and small-bar demand. This has the potential to constrain—but not reverse—the long-running rally, the bank noted.
HSBC lowered its average forecast for full-year 2012 to $1,700 an ounce to reflect price weakness earlier this year. Its previous forecast had been $1,760 an ounce.
However, HSBC upped its average forecast for 2013 to $1,850 from $1,775, listing a potential range of $1,550 to near $2,000. It also upped its 2014 forecast to $1,775 from $1,750.
Gold also may be positively impacted by any further shift in financial markets’ attention away from eurozone debt problems toward similar concerns about U.S. government debt levels and fiscal policies.
Meanwhile, high gold prices in rupee terms and government policies have crimped Indian gold demand and encouraged greater scrap supply. Chinese jewelry demand has been generally robust this year, although it could abate, said the British bank.
HSBC looks for fresh investment demand of 1,572 tons in 2012 after 1,690 a year ago. A rally to $1,900 an ounce could hurt jewelry demand further. Global jewelry demand is forecast at 1,773 tons this year, compared to 1,974 in 2011, HSBC concluded.
Gold Rebounds Following Large Range Down Day
Daily Bars
Prepared by Jamie Saettele, CMT
“Gold has finally done something after consolidation at the top of the multiyear range for several weeks. The sharp break has resulted in a test of the 23.6% retracement of the advance from the late 2011 low. The area is also defined by September congestion. This is a level that could produce a low although 1715 (9/13 low) is probably stronger. The drop has shifted reward/risk to bulls against the 9/7 low at 1689.”
LEVELS: 1691 1715 1729 1749 1757 1780
October 16, 2012 • 14:21:39 PDT“The gold coverage ratio has risen above 100% twice during 20th century,” most recently at gold’s 1980 peak. “Were this ... Read More
Last Updated : 16 October 2012 at 19:15 IST
BMO Capital raises 2013 Gold, Silver price forecasts
Source :Commodity Online
NEW YORK (Commodity Online): BMO Capital Markets has raised its 2013 price forecasts for gold and silver by 14.7% and 11.4%, respectively.
The European Central Bank’s intentions to purchasesovereign debt and a new round of quantitative easing by the Federal Reserve that suggests “continued negative real interest rates and appeal for precious metals as a store of value,” the Toronto based firm added.
BMO Research said that, it now expects the gold price to average $1,950 an ounce in 2013 and break the psychological barrier of $2,000 within the next year. Silver is expected to average $39 an ounce next year.
“They continued that, “for both metals, long-term prices have been increased to account for escalating capital and operating costs.”
BMO Research’s revised 2013 metal price forecasts imply a gold-to-silver ratio of 50:1, compared to the current 53:1. The 30-year historical gold to silver ratio is 55:1.BMO forecasts $1,650 platinum, $725 palladium and $1,200 rhodium next year.
Last Updated : 16 October 2012 at 21:25 IST
Recent Gold correction may not be over: HSBC
Source :Commodity Online
NEW YORK (Commodity Online): The recent correction in gold prices may not yet have run its course, but further falls may well attract institutional buying, said HSBC Holdings plc (HSBC) in a commodity snippet.
According to the British bank, yellow metal tumbled on Monday in response to strong US retail sales data, a firmer US dollar and liquidation by macro hedge funds.
The decline came after the market was unable to hold over $1,790 an ounce and rechallenge $1,800. “Further disappointed selling is possible, and prices could drop closer to $1,700 an ounce in the near term,” HSBC added.
SPDR Gold Shares, the largest gold exchange-traded fund, reported a drop in gold holdings of more than 6 metric tons.
“That said, we suspect that even if gold does fall further, longer-term institutional players may enter the market as buyers and stabilize prices,” HSBC concluded.
Global gold prices are modestly higher in early trading on Tuesday, supported by some bargain hunters stepping in to buy the dip in prices.
A weaker U.S. dollar versus the other major world currencies is also supportive for the yellow metal in early trade on Tuesday.
December gold last traded up $6.30 at $1,743.90 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold was last quoted up $4.70 at $1,742.75. December Comex silver last traded up $0.252 at $32.995 an ounce.
Last Updated : 15 October 2012 at 10:45 IST
'Gold has potential to break all time high during December'
Source :Commodity Online
NEW YORK (Commodity Online): Gold has potential to break all time high of $1,921an ounce during December this year, according to Saxo Bank, a Danish investment bank.
According to the bank, gold investments through Exchange Traded Funds reached a new record during the week with more than 200 tons added since the rally resumed in mid-August once the price moved above $1,625an ounce.
Hedge funds and other leveraged investors only joined in following the break above that level but have since then added 380 tons. Physical demand from China and India, the two major buyers, has been subdued but a pick-up has been witnessed over the last couple of weeks while central bank buying, especially from emerging economies, is expected to reach a new record in 2012.
All in all we continue to see further upside potential for gold and to a lesser degree silver as reduced demand from industrial users increases the pressure on financial investors to keep the supply surplus down, the Copenhagen based bank added.
“With the open ended nature of quantitative easing, part three, we see the potential for gold reaching the 2011 high at $1,921/oz during December following an initial period of consolidating as $1,800 offers strong resistance. Into 2013 the rally may eventually take us up and above the physiological barrier of $2,000 before reaching a technical target of $2,075,” they noted.
The absolute line in the sand below is now $1,500 but we expect technical support at the 200-day moving average, currently at $1,659, will hold off any downside attempts, Saxo Bank concluded.
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