Alternative Outlook

On the back of a pretty uninteresting year for the gold market, financial institutions have been busy looking at what happened in the market and putting together their predictions for the year ahead. This article includes some interesting opinions from Thomson Reuters GFMS who are one of the main commentators on the gold market.
2012 Overview
2012 saw some volatile periods for the gold market but overall the price stayed in a bracket between $1,540 and $1,800 per ounce, finishing the year only marginally higher than it started. Gold did not a…

Gold has been coveted for millennia because of its beauty, rarity and virtual indestructibility. In the current economic climate gold continues to have merit as a store of wealth. Gold as an investment has grown in popularity in recent years, partly because of the risks posed to our modern global financial and economic systems – it is often seen as a safe-haven in times of crisis. The price of gold bullion fluctuated between $1,500 and $1,800 during 2012.

In the shorter term, economic growth has remained constricted, and deflation is just …

Gold enthusiasts were today bouyed today by the decision of Germany’s central bank to pull its gold reserves out of Paris and New York.

It follows warnings from the country’s Court of Auditors that bullion held abroad had “never been verified physically” and was not under proper control.The Bundesbank is to recall its reserves as leverage against future currency fluctuations, resulting in pulling a chunk of its holdings from New York and all its bullion from Paris.The price of gold per ounce rose $14.50 to $1,682.60 by mid…

The FTSE 100 — the index of Britain’s biggest companies — shot past the 6,000 mark last week and hit its highest level for 23 months.

Analysts such as Jonathan Jackson, of stockbroker Killik & Co, expect it to reach 6,500 by next Christmas. But a breakout year is far from certain.

John Higgins, senior markets economist at consultancy Capital Economics, expects the FTSE to dive back towards 5,000 if the debt crisis in Europe erupts again.
Boom: The price of gold went from $300 an ounce in 2001 to $1,920 in September 2…

Since 2000, gold has outperformed the S&P 500 each year nine of 12 times. How does gold behave like an investment and what are the fundamentals of investing in gold? What are the different ways investors can get exposure to gold in their portfolios?

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GLOBAL gold demand may be on the decline – down 11 per cent, or 138.9 tonnes from the third quarter of 2011. But it has had a series of highs since the economic downturn.

Gold is the classic “store of value”. It’s traditionally seen as a safe haven in troubled times, providing a hedge against inflation and the debasement of currencies. Today, continued and unpredictable inflation may mean investors should consider holding gold to diversify away from the diminishing purchasing power of traditional currencies. The money supply is conti…

Global gold demand in Q3 2012 was 1,084.6 tonnes (t), down 11% from the record Q3 2011 figure of 1,223.5t.   This dip in demand is in comparison with exceptional demand in Q3 last year. Gold demand remains resilient. Q3 2012 was above the five year quarterly average of 984.7t, according to the World Gold Council’s Gold Demand Trends Report.

In value terms gold demand was 14.0% lower year on year at $57.6bn and the average gold price of $1,652/oz was down 3% on the record average Q3 2011 price.

The key findings from the report are …

The volume of gold in the world that has already been mined is more than 10pc lower than previous estimates, according to a new study. But what does that mean for the price of the precious metal?

Long time gold advocate James Turk, who sells the metal through his GoldMoney Foundation, and Juan Castañeda, who teaches at the University of Buckingham, calculated that the gold stock above ground is 155,244 tonnes. This is significantly less than the figure of 171,300 tonnes, which is a commonly-used estimate.

This diff…

The World Gold Council has provided a summary outlining its statistics for the market in gold through the third quarter of 2012.
Overview
This commentary summarises gold’s price performance in various currencies, its volatility statistics and correlation to other assets, and the macroeconomic factors that influenced gold’s behaviour during the quarter. In this issue, we explore the influences that unconventional monetary policy has on financial markets. In particular we discuss the effect of central bank policy actions on gold.
Q3 in s…

US Federal Reserve:

£25bn ($40bn) per month stimulus to US Economy
Interest rates stay below 0.25%
Previous QE totalling £1.4tn ($2.3tn)

Bank of Japan:

£78bn (10 trillion Yen) bond buying to devalue Yen to increase exports
Interest rates stay between 0% & 0.1%
Previous QE totalling £546bn (70tn Yen)

Bank of England:

Further QE could be on the horizon for late 2012 predicted at £50bn
Interest rates stay at 0.5%
Previous QE totalling £375bn

The US Federal Reserve (FED) announced last week that they w…