Firm raises price forecasts for 2013, 2014
Global Hunter Securities raised its average
gold price forecast for 2013 and 2014 on Wednesday, and said that
gold prices can surpass $2,000 an ounce by early next year.
"The U.S. Federal Reserve, through multiple initiatives and actions, consequently has become
gold's best friend during the past four years," Jeffrey Wright and Richard Hastings, strategists at GHS, said in a report. And "the commitment from the Federal Reserve to maintain an accommodative policy until 2015 ... provides a strong foundation for what we expect will be continued gains in gold prices into 2014."
GHS raised its 2013 price forecast to an average of $1,850 an ounce, from $1,500. It also upped the 2014 average price forecast to $1,750 from $1,400. ...
Downside risks for
gold prices come primarily from the "equity markets and the strong inverse correlation between global stock prices and the U.S. dollar," the strategists said.
"Should stocks decline because of any combination of eurozone debt fears, Middle East conflicts, weak 2013 earnings expectations and/or fiscal cliff effects, then ... the dollar would probably strengthen, hurting
gold prices," they said. "If these effects were severe enough, then we believe that
gold prices could decline by 20%."
Even so, a price correction would not change the longer-term direction of
gold prices, they said. "We believe that the primary trend remains higher."
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