Salient to Investors:
The median estimates of the 10 most-accurate precious metals analysts tracked by Bloomberg over the past 2 years predicts gold will drop to an average $1,250 in Q4 2013, $1,225 in Q1 2014, $1,195 in Q2 2014, and a 4-year low of $1,175 in Q3 2014 due reduced US stimulus amid faster economic growth.
Dagong Global Credit Rating cut its US credit rating.
Tom Kendall at Credit Suisse said investors’ desire to buy gold as a hedge against the consequences of monetary policy has diminished, while other asset classes, particularly equities, are doing well.
The mean of 90 economist estimates predicts economic growth will increase to 2.6 percent in 2014 versus 1.6 percent in 2013.
Jeffrey Currie at Goldman Sachs said gold is a slam dunk sell for 2014 because the US economy will strengthen after lawmakers resolve the stalemates over the budget and debt ceiling, and expects gold to end 2014 at $1,050.
The IMF cut its 2014 global growth outlook to 3.6 percent. Economists predict China will grow 7.4 percent in 2014, the least since 1990, and the euro area will grow 1 percent in 2014.
David Wilson at Citigroup said any big downside moves in gold would lead to a surge in Chinese buying, as people are buying gold not just for investment but for jewelry, whose market is growing rapidly as they bargain hunt.
The World Gold Council said consumer purchases will reach as much as 1,000 tons in India and China in 2013, versus China’s record of 778.6 tons in 2011 and India’s record high of 1,006.5 tons in 2010. Central banks added 535 tons to reserves in 2013, the most since 1964, and may buy another 350 tons in 2013.
ETPs have sold 731 tons in 2013 and own the lowest assets since May 2010.
Robin Bhar at Societe Generale said the gold bull market is definitely over as a lot of gold was held for speculative purposes, investment and a store of value, and that is less of a reason going forward: equities, fixed-income or real estate earns a return.
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