Friday, October 5, 2012

Gold Prices predicted $2,400 summer 2013

Gold Prices predicted $2,400 summer 2013 : Gold could hit an all-time high of $2,400 by next summer, driven up by a third round of quantitative easing in the US. The first round of QE in February 2009 caused the gold price to increase rapidly from a base of $900/oz – from which it has never looked back.

BlackRock fund manager Evy Hambro who invests in the precious metal and gold equities, predicted that QE3 could result in the gold price hitting US$2,400/oz by the middle of next summer.

In his gold report this week he said: "The gold chart has turned decidedly bullish with the 50-day moving average rising above the 200-day moving average. The last time this happened was in February 2009, which interestingly was shortly after the implementation of QE1. Then, gold was $900/oz and never looked back. Should we witness a similar rally, prices would be taken to $2,400/oz by midsummer next year – and $1,760/oz would be the new floor."

The International Monetary Fund released data this week which revealed central banks continue to buy gold with both South Korea and Paraguay recently adding to their reserves.

South Korea has doubled its bullion assets over the past year, purchasing 16 tonnes in July alone.

Mr Hambro said: "If the third round of quantitative easing leads to further weakness of the US dollar, central banks may be prompted to switch more cash reserves into gold."

Spot gold was up 0.6pc to $1,788.54/oz on Thursday morning, just shy of an 11-month high above $1,791 hit earlier in the week. U.S. gold futures gained 0.5pc to $1,790.20.

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