LAST WEEK'S announcement of more quantitative easing by the US Federal Reserve - aka QE3 - is set to buoy the portfolio of people choosing Gold Investing, according to analysts and strategists at some of the world's biggest banks.
"We raise our [recommended] weight in gold," writes Fredrik Nerbrand, Global Head of Asset Allocation at HSBC, because his team believe that Gold Investing "will be the main beneficiary of QE."
With a long-term price forecast of $3,000 per ounce, HSBC's asset allocation strategists also advise building investment in industrial metals, "as valuations remain cheap and easing should have upside for real assets.
"[But gold also] offers diversification benefits and low investor penetration," they add, noting the currently low level of participation in gold's 10-year bull run by Western investment capital.
Shorter-term, says a Bloomberg video report from Alix Steel in New York, "TD Securities now sees $2000 by January, and Commerzbank by the end of the year." Gold Investing is widely expected to be rewarded as the US central bank pumps more newly created money into the financial markets. Because "Gold has traded in tandem with inflation expectations," says Steel.
The outlook for industrial commodities may not be so rosy, however, says Bloomberg. "Mike Whitner of SocGen is shorting oil," says Steel's report, "because weak marco-economic outlook is going to be hard to change" even with $40 billion of new quantitative easing by the Fed.
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