Gold Could Potentially Reach $1,900/oz According to HSBC Analysts -- Prices Continue to Rally on Stimulus Speculation
10 August 2012 - 2:20PM
Marketwired
Gold stocks have struggled in 2012 as a slowing global economy has
resulted in lackluster physical and investor demand for the
precious metal. The Market Vectors Gold Miners ETF (GDX) has fallen
close to 17 percent this year, while the Market Vectors Junior Gold
Miners ETF (GDXJ) has fallen over 21 percent. Five Star Equities
examines the outlook for companies in the Gold Industry and
provides equity research on NovaGold Resources Inc. (NYSE: NG)
(TSX: NG) and New Gold Inc. (NYSE: NGD) (TSX: NGD).
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HSBC analysts have stated in a recent report that gold could
potentially gain from the political and economic turbulence in the
U.S. and by the end of the year hit $1,900 per ounce.
"Economic uncertainty, geopolitical tensions and the uncertainty
of the U.S. November elections are theoretically gold-bullish," and
gold should rally in the second half of the year "when U.S. growth
is poor and the dollar is weak," a new HSBC report said. "We expect
prices to rally to above $1,900/oz by the end of the year. Patience
is the most important commodity."
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Gold prices increased for the third time in four days Wednesday
on increased speculation that central banks would take stimulus
measures to help bolster their economies. Gold prices have gained
1.6 percent since August 2nd. From the end of 2008 to June 2011
gold soared roughly 70 percent as the Federal Reserve purchased
$2.3 trillion in debt and kept borrowing costs at record lows.
"The investor side is likely to remain interested for as long as
sentiment is upbeat and peripheral bond yields in the [euro zone]
stay off their summer peaks. It might seem illogical, but so far
gold has failed to attract any safe-haven inflows, instead trading
as any other risk asset and in line with the broader market
sentiment," analysts at VTB Capital wrote in a note to clients.
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