Salient to Investors:

Goldman Sachs said gold’s cycle has turned as the US economy gathers momentum, and cut its 3-month forecast to $1,615 from $1,825 and expects $1,550 in a year’s time. Hedge funds are the least bullish on gold since 2008.

Adrian Day at Adrian Day Asset Mgmt said confidence in a recovering US economy and a strong global stock market has reduced the perceived need for gold, but sees gold at buying levels because there is no expectation of serious tightening in any major economy anytime soon.

George Soros cut his stake in the SPDR Gold Trust by 55 percent in Q4 2012, but John Paulson maintained his holding.

Hedge fund net-long positions are down by 79 percent since October 2012. Credit Suisse said an unwind in the bull run has begun. Societe Generale said the gold rush is over.

The IMF predicts global expansion will climb to 3.5 percent in 2013 from 3.2 percent in 2012, despite a second year of contraction in the euro area.

BNP Paribas said gold will average a record $1,740 in Q4 as quantitative easing weighs on the dollar and raises the outlook for faster inflation. BNP cut its 2013 outlook by 6.7 percent to $1,670.

Mark O’Byrne at GoldCore said sentiment is the worst in recent years and therefore is due a bounce – gold is oversold on a host of benchmarks.

The World Gold Council said Indian and Chinese demand will rise at least 11 percent in 201, and central banks will be strong buyers in 2013.

The US Mint sold 80,500 ounces of gold coins in February versus 150,000 ounces in January, and 28 percent more than the monthly average in 2012. Central banks added 17 percent more to reserves in 2012 than in 2011.

Credit Suisse expects commodities will return 6 percent in the next 12 months.

Ole Hansen at Saxo Bank A/S said the real key is whether the stimulus will succeed in creating growth, which ultimately drives the physical demand for commodities.

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