Some gold bulls are calling for the precious metal to hit $2,000 an ounce this year on the Eurozone debt crisis and demand from China and India. However, gold exchange traded funds need to first get safely back above the 200-day moving average.
Gold’s recent dip below the 200-day has been unfamiliar territory during the metal’s spike since the beginning of 2009.
Gold price forecasts are calling for a push to $2,000 an ounce later this year or in early 2013, according to the recently published Thomson Reuters GFMS annual gold survey, The Guardian reports. Global investment in gold jumped more than 20% last year to a record $80 billion, lifting the price to its high of $1,920 an ounce in September, according to the study.
Gold futures dipped on Thursday afternoon after touching a five week high earlier in the week. SPDR Gold Shares (GLD) is up 6% year to date, benefiting from a weaker U.S. dollar. Other gold ETFs include ETFS Physical Swiss Gold Shares (SGOL) and iShares Gold Trust (IAU).
Gold for February delivery fell 0.6% on Thursday, resting at $1,654.50 an ounce, reports Tatyana Schhumsy for The WSJ. Reports out of the U.S. showed that core inflation rose 0.1% from the previous month, with consumer prices flat in December. [Investors are Coming Back to Commodity ETFs]
The latest news from the International Monetary Fund that it wants to bolster its capital by at least $500 billion to help insulate global economies from the Eurozone debt crisis could be a bullish sign for gold. The euro regained some strength, pushing the U.S dollar down. Speculators have large short positions betting against the euro.
“The market took heart that this would help ease fiscal problems facing the Eurozone,” Marc Ground, precious metals analyst with Standard Bank, reported in a client note, in the WSJ story. “This renewed confidence has seen markets adopt a cautious risk-on stance, pulling the dollar down and consequently easing downward pressure on precious metals.” [Gold ETFs Battle 50-Day Moving Average]