Just how high can the price of gold go? Even the world’s more reliable gold market forecasters cannot agree.
Danske Bank A/S and Credit Suisse Group AG, traditionally the most accurate forecasters, say gold prices will peak this year. Rival forecaster UniCredit SpA says the rally could go on beyond the foreseeable future.
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Danske Bank’s Christin Tuxen has been the most accurate price predictor over the last eight months and says prices should average $1720 per ounce in 2013 and $1600 per ounce in 2014.
Credit Suisse’s Tom Kendall predicts prices of $1740 and $1720 respectively. UniCredit’s Jochen Hitzfeld predicts $1700 and $1800.
Record average prices are predicted by all three during 2013 because global central banks’ policy stimulus is still inciting investors to hedge against inflation and currency devaluation.
The top six precious metals analysts followed by Bloomberg are also still bullish for this year. Only when Fed policy changes and monetary policy begins to tighten is the price of gold expected to begin to decline.
The danger point will be when key interest rates rise
above the inflation rate. But so far, there is no end in sight to the currently negative real interest rate environment.