Gold News

Gold Price 2014 Base Case: "No Recovery" Say Analysts

Worst year since 1975 "won't see" gold price recovery as China buying faces "heavy lifting" in matching Western sales...
 
GOLD PRICE losses of almost 25% year-to-date aren't expected to see a sharp recovery in 2014, according to analysts previewing the year ahead.
 
"Investors have become increasingly disillusioned with gold given the apparent lack of [2013] price response," says the latest Precious Metals Weekly from London-based consultancy Metals Focus, citing continued money-printing by central banks, plus economic and geopolitical tensions in Europe and the Middle East.
 
"There is little doubt that gold has entered a bear market."
 
Rising consumer prices in the West have also failed to boost the gold price in 2013, notes Reuters, saying that investment managers atttending this week's Reuters Global Investment Outlook Summit "were downbeat on gold...expecting prices to extend losses or at best stagnate since inflation is an issue only for the long term."
 
The worst gold price drop since 1981, this year "has sustained two major shocks" the Wall Street Journal quotes Macquarie Bank analyst Matthew Turner in London, who points to Western gold trusts shedding well over 700 tonnes as investors sold, plus anti-gold import rules hitting former world No.1 consumer nation India.
 
That has left some 1,000 tonnes of gold "to be absorbed," says Turner, putting the "heavy lifting" on China – now the world's No.1 consumer as well as its top gold-mining producer.
 
China's gold demand is set to hit record levels in 2013.
 
"Physical buying is taking place," the WSJ also quotes Suki Cooper at London bullion market-maker Barclays Bank. "But it’s not enough to drive prices higher. At the same time you have continued disinvestment" by Western funds.
 
For the gold price looking ahead, says Turner at Macquarie, formerly at Japanese conglomerate Mitsubishi, "The base case of 2014 is not for a price recovery."

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