In other Wall Street research, Barclays does not think the gold market has reached bubble status yet and also expects higher physical investment demand going into 2012.
“Our strongest conviction trade remains long precious metals and specifically gold,” Barclays sad in a research note, according to the report. “According to the measures we employ, gold would need to move above $2,170 per ounce for prices to be considered extreme and for the market to start displaying bubble characteristics.”
According to CIBC’s Barry Cooper, Managing Director of Institutional Equity Research, gold will hit $2,000 this year and $2,200 in 2013. Cooper cites positive fundamental factors, including lower global supply, high investment demand, central banks exhibiting higher demand for physical gold, low interest rates, uncertain economic outlook and strong jewelry demand from China and other Eastern countries. [Gold, Silver ETFs Rise Late as Bargain Hunters Pounce]
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.