Many banks are still bullish on thier outlook of gold in 2013. In reviewing Scotia Bank, Barclays, BofA and Citigroups estimates I have found that these banks are still bullish on gold moving into 2013 but have some questions moving into 2014.
Scotia Bank: In 2013 the bank states in it’s report “Precious Metal Forcast PGM” which was released in November 2012, that they predict gold will reach $2,200/oz. The bank supports the increase in gold “because of the mess the Western world is in.” The bank continues by stating “Europe has a debt problem that is proving all but impossible to solve and all efforts to date have revolved around throwing more money at the problem to avoid the monetary system from breaking down. That should be reason enough to be bullish for Gold and we think the latest move higher in Gold prices shows that it is.”
Looking beyond 2013, Scotia Bank predicts gold to fall back to $1,100/1,200oz as investment Gold is liquidated.
Barclays’ outlook for gold 2013: Sober look is reporting that Barclays’ outlook for gold is not as bullish as Scotia Bank’s. The company believes the largest risk for gold remains the strength of the US dollar. The report also states “Tactical allocators have taken some profits due to the recent stability of the dollar. That reduced some of the “fast money” in the market.” The strength in the US dollar is why they predict gold to reach $1815/oz in 2013.
Bank of America: Bloomberg recently issued an article stating bank of America’s stance on gold for 2013. The report titled “BofA favors gold, copper for 2013. Commodities outlook neutral” states that “Global economic growth will average 3.2 percent in 2013, “modestly” supporting demand for raw materials”. The report also states “The so-called fiscal cliff of automatic tax increases and budget cuts could tip the U.S. economy into recession and “abrupt policy changes” in Europe may cause “large commodity price swings,”. John Bilton, European investment strategist for the bank stated “We expect large-scale policy easing by the Fed and the ECB should push gold prices higher,” The bank is forecasting gold prices at $2,000 an ounce for 2013 and $2,400 for the end of 2014.
Citigroup: The Business Insider is reporting that Citigroup has a mix view on gold. The article states that Citigroup believes that gold will have a average year price of $1,749.00 an ounce in 2013 before falling in 2014 to $1,655.00. The company states “President Obama’s victory was expected to be positive for gold since it would benefit from “a continuation of dovish monetary policy”. Gold prices have also been supported by central bank gold purchases. Moreover muted gold demand in India is expected to have picked up during Diwali.”