Gold prices may reach new high in 2013



REUTERS

Published — Friday 7 December 2012

Last update 7 December 2012 12:29 am

| نسخة PDF Print News | A A

LONDON: BNP Paribas cut its gold price forecast for 2013, citing cautious market sentiment, and sees prices dropping in 2014, which would be the first annual decline in 14 years.
“Our downward revision (for 2013) is largely due to mark-to-market considerations rather than a change in our fundamental view,” analyst Anne-Laure Tremblay said in a note to clients.
The analyst said gold’s performance was disappointing in the last two months as the metal failed to benefit from the absence of extreme episodes of risk aversion, US Federal Reserve easing, or seasonal demand in India and the West.
Tremblay still expects gold to achieve a new record high in 2013 due to further monetary easing, less tail risk related to a breakup of the euro zone, and ongoing support from physical demand.
BNP lowered its 2013 gold price forecast to $ 1,865 per ounce from $ 1,900. The bank expects gold prices to average $ 1,780 an ounce in 2014.
“Fundamentals of the precious metal will turn progressively more negative (in 2014) as the market starts to anticipate a withdrawal of monetary easing measures in line with improving economic growth,” the analyst said.
“The extent of the decline will, however, be limited as gold will continue to attract investor flows thanks to its diversification and safe haven properties.”
Gold prices steadied above $1,690 an ounce yesterday, as buyers remained on the sidelines after the European Central Bank left rates unchanged as expected, and on uncertainty over negotiations to avert a US fiscal crisis.
Confidence in gold has ebbed this month after it failed to push above $ 1,730 in November. A weak technical picture helped push prices to a one-month low on Wednesday, taking them below their 100-day moving average for the first time since August.
Spot gold was at $ 1,692.91 an ounce at 1303 GMT, little changed from $1,693.41 an ounce late on Wednesday, while US gold futures for December delivery were up 60 cents an ounce at $1,694.40.
The euro was little changed against the dollar after the European Central Bank kept interest rates on hold at 0.75 percent as expected by most market players.
Buyers are awaiting direction from non-farm payrolls data today, and next week’s US Federal Reserve policy meeting, as well as clearer signals on how the US will deal with negotiations over its upcoming “fiscal cliff.”
That refers to the possibility that a $600 billion package of tax hikes and spending cuts due to kick in in the New Year could push the world’s biggest economy back into recession.
“We have the ECB decision today, with some (talk) of Spain applying now for financial help, and furthermore we have the Fed decision,” LGT Capital analyst Bayram Dincer said. “Also, some people are positioning for year-end, profit taking. All of this is adding to negative sentiment in the gold market.”
The ECB is wary of taking any action that could see the euro zone’s governments soft-pedal budget-consolidation efforts. That puts the onus on Spain to ask for a full bailout before the ECB can intervene and buy Spanish sovereign debt.
Gold priced in euros slipped into oversold territory after falling nearly 2 percent this week, posting its biggest one-day decline in six months on Wednesday and touching its lowest since mid-July at 1,288.85 euros an ounce.
Its 14-day relative strength index stood at 28.9 yesterday, with any reading less than 30 considered to signal oversold conditions.
Investors’ appetite for physical gold and physically backed investment products remained sharp, with holdings of the largest gold exchange-traded fund, New York’s SPDR Gold Trust, at a record high.
Demand in India, historically the world’s biggest buyer of gold, was also firm as prices fell to their lowest in a month, weighed by a stronger rupee and a decline in spot prices.
“Buying is on, as people feel prices are good,” Haresh Acharya, head of the bullion desk at Gujarat-based Parker Bullion, said. “Wedding demand is expected to continue for another couple of months.”
From a chart perspective, further losses in gold could take prices down to support at its November low at $ 1,672.50 an ounce, and its 200-day moving average at $ 1,660.
Among other precious metals, silver was down 0.15 percent at $ 32.79 an ounce.
Silver has lost some ground to gold so far this month, with the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, edging further from last week’s near eight-month low at 50.42 to 51.6 yesterday.
Spot platinum was up 0.33 percent at $ 1,581.15 an ounce, while spot palladium was up 0.07 percent at $ 682.97 an ounce.

What's happening around Saudi Arabia

JEDDAH: A Saudi citizen was killed in shelling fired across the border from Yemen into the southwest of Saudi Arabia on Sunday, local media reported.A shell fell on a house around dawn in Najran province, civil defense department spokesman Ali bin Om...
JEDDAH: Female voters in Al-Ahsa have urged the authorities handling the municipal elections to drop the condition of presenting the national identity card while enrolling themselves in the voters’ list. Some women in Madinah too have appealed for mo...
JEDDAH: After the recent incident of a rat eating from a bowl at a well-known food outlet in a Jeddah mall came to light, residents have called for food hygiene ratings of restaurants and roadside eateries across the city.Although the municipality wo...
JEDDAH: A muezzin (one who recites the Adhaan) of a Riyadh mosque recently sprung a surprise in the Austrian tourist town of Zell am See by his Adhaan after taking permission from members of a musical band.Social media is abuzz with the news and vide...
RIYADH: A Sri Lankan national, who works as a cleaner in the Kingdom, was commended and rewarded by the Saudi Commission for Tourism and National Heritage (SCTNH) for returning a bag containing gold to its owner.“Prince Sultan bin Salman, president o...
RIYADH: Bangladesh State Minister for Foreign Affairs Mohammed Shahriar Alam arrived in Jeddah on Sunday to meet with his Saudi counterpart Nizar Madani on Monday.On arrival at the royal terminal, the minister was received by Director General of the...
RIYADH: A report of the Saudi Commission for Tourism and National Heritage predicts the rate of growth in job opportunities in the country's tourism sector between 2010 and 2020 will be 10 percent a year as compared to a global growth rate of 2.5 per...
JEDDAH: Two million meningitis vaccines have been distributed among health centers in 20 governorates and provinces across the Kingdom for domestic Haj pilgrims.It is mandatory for all pilgrims to be vaccinated against meningitis and for those coming...
JEDDAH: The Makkah governorate has announced four new road projects linking Makkah and Jeddah. The new roads will facilitate smoother and faster travel between the cities.An estimated 35 million people will benefit from the projects, which will inclu...
JEDDAH: A major disaster is waiting to happen in the fish market of Madinah because of the callous attitude of traders toward handling of gas cylinders. A visit to the market presents a dreadful picture of cylinders kept on top of each other without...
JEDDAH: Information and Culture Minister Adel Al-Toraifi has approved the appointment of Khalid Bo-Ali as editor in chief of the Eastern Province-based Alsharq Arabic newspaper. He was nominated for the post by the board of directors of the newspaper...
JEDDAH: Jamil Farsi, head of the Gold and Jewelry Committee at the Jeddah Chamber of Commerce and Industry (JCCI), says he expects 3,000 job opportunities to be created for Saudi women in the jewelry design and gold sector across the Kingdom, with ab...
JEDDAH: More than 50 visually challenged people successfully performed Umrah with the help of the Ebsar Foundation for the Visually Impaired and the Ambassadors of Volunteers organization under their program “Umrah for the visually impaired,” which w...
JEDDAH: Although the Ministry of Labor is opening its doors to receive complaints from private sector employees, many Saudi females employed in cosmetic and perfume shops in Madinah are not making complaints about being overworked due to fear of losi...
JEDDAH: Health Minister Dr. Khaled Al-Falih is set to increase the number of beds in all private sector hospitals, as per new implementation regulations adopted this year.The move will help address the problem of delays in public sector projects, as...

Stay Connected

Facebook