JP Morgan and Goldman See $1,800/oz Gold By Year End – Iran, Middle East and Inflation Risks Cited

Research houses, analysts and banks are revising their estimates for year end 2012 gold prices higher.

They believe that concerns about inflation and demands for gold as a store of value should lead to higher gold prices by the end of 2012.

JP Morgan and Goldman Sachs have overnight revised upwards their year end forecasts to $1,800/oz and $1,840/oz respectively.

JPMorgan said in a note that it expects gold to move toward $1,800/oz by year end, citing negative real interest rates in the U.S., sovereign risk in Europe and instability in the Middle East.

Goldman Sachs sees gold at $1,840/oz by end-2012.  Goldman cite the supply side fundamentals and monetary policy easing which are very supportive.

So said Jeffrey Currie, head of commodities research at Goldman in an interview with Linzie Janis on Bloomberg Television.

Currie believes monetary policy easing and FOMC pursuing QE3 “will be critical to putting upward pressure on gold prices”.

Goldman remain most bullish on oil as a trade due to supply issues and the “situation in Iran”.

Bank of America Merrill Lynch said that gold may reach $2,000/oz by yearend.


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