“Gold is likely to bust through its previous nominal highs and hit $2,250 before, according to Canadian investment advisory firm Macquarie Private Wealth.
Gold touched $1,923.70 per ounce in September of last year and since has retrenched. It trades now at $1,685, up about 1 percent on comments from Federal Reserve Chief Ben Bernanke that suggested further monetary easing is ahead.
It’s just getting started, Macquarie is telling clients, according to a report from Business Insider.
Among the reasons cited: A weak recovery will keep the Fed at virtually zero rates through late 2014, as it has promised; more easing is likely; and various trading and seasonal indicators suggest that investors have oversold the metal.
Expect Indian and Chinese demand — which accounts for 42 of total gold consumption — to recover, mining executives tell Reuters.
“Those are two economies that are likely to grow at a significant pace, certainly relative to the West,” Nick Holland, chief executive of miner Gold Fields, told the news service.
“They have a strong affinity for gold, and they also have an increasing number of the population who are being urbanized. Of the extra income they get, some will find its way into gold.”
The uptick in buying could be felt quite soon, according to a report in the Indian daily The Hindu Business Line.
A five-day strike among jewelry shops in protest over the doubling of duty on gold imports has ended. Reopened shops and lower prices should spur consumer buying, the newspaper suggested.”
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Mmmm. Gold…. tasty.