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SB sanguine about gold in 2013
By By Richard Fu |
December 7, 2012, Friday
|
Online Edition
Online Edition
Gold may average US$1,850 an ounce next year because central banks worldwide will maintain their easy-money measures while real interest rates will be negative, according to Standard Bank.
"Gold should find very good support going forward," Walter de Wet, the head of commodity research at the South African bank, said in an interview in Shanghai today, citing "very easy" monetary easing from central banks and negative real interest rates.
"We expect the euro zone to be in recession next year again and the growth in the US to be around 1.9 percent, which is not substantial," he said.
He said the Federal Reserve, the US central bank, may expand its stimulus plan next year beyond a program to buy US$40 billion of mortgage debt per month – the third round of quantitative easing or QE3 – to revive growth.
QE3, announced in September, had triggered a rally in gold prices. Investors bought gold because they worry the easing would lead to higher inflation.
Gold is trading around US$1,703, having fallen six of the last eight weeks.
De Wet said bullion may rise to US$1,900 or even US$2,000 next year but at that level prices won't be on a "sustainable basis" because the rally would reduce jewelry demand in India, the world's largest gold buyer.
He also said silver will rise but it will be difficult for silver to reach US$40 an ounce next year, citing weak industrial usage, which accounts for 70 percent of silver demand. Silver is around US$33.
"Gold should find very good support going forward," Walter de Wet, the head of commodity research at the South African bank, said in an interview in Shanghai today, citing "very easy" monetary easing from central banks and negative real interest rates.
"We expect the euro zone to be in recession next year again and the growth in the US to be around 1.9 percent, which is not substantial," he said.
He said the Federal Reserve, the US central bank, may expand its stimulus plan next year beyond a program to buy US$40 billion of mortgage debt per month – the third round of quantitative easing or QE3 – to revive growth.
QE3, announced in September, had triggered a rally in gold prices. Investors bought gold because they worry the easing would lead to higher inflation.
Gold is trading around US$1,703, having fallen six of the last eight weeks.
De Wet said bullion may rise to US$1,900 or even US$2,000 next year but at that level prices won't be on a "sustainable basis" because the rally would reduce jewelry demand in India, the world's largest gold buyer.
He also said silver will rise but it will be difficult for silver to reach US$40 an ounce next year, citing weak industrial usage, which accounts for 70 percent of silver demand. Silver is around US$33.
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