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Gold Price Report & Forecast for 2013

Gold more than any other precious metal face wide price fluctuations from year to year. There are many factors affecting the price of gold (fundamental and psychological factors). The demand and the supply for gold are changing due to variables such as government policies, currency volatility and investment strategies. Gold has been a major performer over the last decade and the main reasons for that were: i) The global economical uncertainty (especially in US and Eurozone), and ii) The increase of demand from Asia (Jewellery and Investment Gold). Gold prices have increased from $300 per ounce in 2000 to $1,665 per ounce today (February 2013).

Chart: Gold Price 10-Years (February 2003-February 2013)

Chart: The Price of Gold (2003-2013)

Gold Price 52Wk High 1,801.5 USD (-7.49%)

Gold Price 52Wk Low 1,538.1 USD (+8.35%)

20-Day Price Average 1,673.4 USD

100-Day Price Average 1,712.0 USD 

Can Gold Remain Hot in 2013? -Some Insights from Expert Analysts

But can this gold rally continuous in 2013? Can the gold price gets as high as 1,900 USD or is it time for a strong correction which can bring the price of gold even to 1,500 USD?

Many gold analysts argue that higher gold prices seam inevitable in 2013, and also they support that the lower end of the price range is fixed and reached already. Other analysts argue that the gold price has lost its momentum and that it is now by far more expensive than other commodities.

Some Insights from Experts

-Goldman’s analysts support that the gold price rally will end in 2013, after peaking at about 1.850 USD.

-BNP Paribas, is forecasting new price highs for 2013 and 2014 and an average price of 1.750 USD in 2013.

-The Bank of America’s research estimates an average gold price of $2,000 in 2013, and a strong move to $2,400 at late 2014.

-Barclays analysts are forecasting gold price around $1,800 in 2013, while they are expecting a US Dollar appreciation against Euro.

The Role of FED: High Inflation or Dropping Unemployment may Crush the Price of Gold

Historically, the price of gold is highly related to the FED monetary policies. If the US economy sees an inflation increase over 2.0% {1,7% today} or the unemployment ratio to drop below 6.5% {7.9% today}, then FED is expected to raise US interest rates. According to that scenario the US dollar is expected to get stronger and the price of gold will probably crush, even to 1,500 USD. Let’s not forget that the price of gold is measured in US Dollars and thus when US Dollar gets stronger the price of Gold gets weaker. Furthermore, the level of US interest rates is highly affecting the price of gold, as it may motivate investors to sell gold in order to exploit high interest rate returns.

The Supply for Gold in 2013 and the Role of China

The gold supply during the last two years was relative unchanged causing no impact on the price of gold. As Societe Generale’s analysts argue, the supply of gold is expected to rise both in 2013 and in 2014. The reason for that is that the gold production will rise in China significantly.China today is buying foreign gold mines, in the same way that it does it for any other commodity that it needs. From the other hand, the consumer demand for gold is increasing in China, following the rise of the middle class incomes.

China Gold Reserves Relative to other Economies

China’s gold reserves represent only 0.75% of the China’s GDP in 2012. That same figure in US is 2.95%, while it is 9.50% in Switzerland, 5.50% in Germany and 1.75% in India. That is creating a long-term opportunity for the price of gold as increasing demand from China may push Gold price in higher levels. In the following chart we may observe regional changes in the demand for Gold.

Demand for Gold 2012

 

Final Conclusion:

The year 2013 seems to be an historic year regarding the long-term trend of the price of gold. If FED decides to continue its policy of easing US economy, then we might see Gold Prices to new historical highs {1.900 USD per ounce in 2013 and 2,100 USD in 2014}. From the other hand if FED decides that the US economy is now strong and therefore increases US interest rates, then the price of gold will crush {1,500 USD in 2013}.

 Historic View of the Gold Price

? Giorgos Protonotarios

 

Read more on TradingCenter.org:

Identifying Charts Patterns

A Historic View of the Price of Gold

Books for Trading

Relative External Links:

? Binary Options –Compare Gold Traders at BinaryValue.com

? World Gold Council Website

? USA Gold –General Information

Gold –ETFs:

? ETF: StreetTracks Gold Shares ETF (GLD)

? ETFS Physical Asian Gold Shares (AGOL)

 

 

The Price of Gold in 2013 -Forecast & Report

TradingCenter.org (February 8, 2013)

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