Salient to Investors:

Gold is headed for a 12th consecutive annual gain, the longest streak in data going back to 1920. Bullion held through ETPs reached a record 2,603.7 tons on Nov. 16, exceeding the official reserves of every nation except the U.S. and Germany. Investors bought 247 metric tons through ETPs in 2012, exceeding annual US mine output. The IMF said central banks added to reserves for 19 consecutive months through August, the longest streak since 1964.

Bullion is up sixfold since the end of 2000 versus the 34 percent advance in the S&P 500, with dividends reinvested, and the 91 percent return on Treasuries. The Fed Bank of Minneapolis said gold has yet to exceed previous records when adjusted for inflation, with its 1980 record of $850 equal to $2,398 today.

Options traders are bullish. The median analysts expects gold to rise every quarter in 2013 and average $1,925 an ounce in Q4 2013.

John Paulson increased his stake in the SPDR Gold Trust  by 26 percent in Q2 to 66 tons.

Michael Mullaney at Fiduciary Trust sees gold as a hedge against the follies of politicians.

George Soros increased his investment in SPDR Gold Trust  by 49 percent in Q3, the most since 2010.

Touradji Capital Mgmt sold all of its 82,000 shares in the SPDR Gold Trust in Q3, Lone Pine Capital lowered its stake by 31 percent, and Third Point lowered its bet by 10 percent.

Tom Kendall at Credit Suisse Group expects gold averaging $1,880 in Q4 2013. Jochen Hitzfeld at UniCredit expects $1,950. Daniel Brebner at Deutsche Bank expects $2,300 in Q3 2013.

Alan Gayle at RidgeWorth Capital Mgmt said global monetary stimulus is likely to continue, particularly in the wake of growing fiscal austerity, and that pressures authorities to stimulate the economy, which will debase the currencies and put a bid under gold.

The median strategist expects the US Dollar Index to average 82.6 in 2013 versus 81 now. Steven Englander at Citigroup said the currency market is signaling it isn’t convinced the Fed will fulfill its pledge to pump record amounts of cash into the economy through 2015.

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