Update : Gold High $1533 Thursday 4 GMT

Forbes

Heather Struck

MARKET PULSE

David Loesser, president of the Estate Planners Group, said he has no questions anymore about the effects quantitative easing has had on markets. Just look at the charts for gold and silver today, and compare it with FX charts for the U.S. dollar.

“There is a negative correlation rate for the dollar versus gold and silver,” Loesser said. Today the dollar began to fall further today after Ben Bernanke’s press conference to 1.47 against the euro and 1.66 against the British pound. Gold and silver both continued to soar upwards, rising 1.4% and 5.6% respectively after the conference commenced.

“Inflation is the big game that the Fed has to deal with,” Loesser said, adding that it is for this reason that the dollar has to contend with the Fed’s easy monetary policy for a period that Bernanke was especially vague about in the press conference today. (Read “Why The Fed Stays Vague On Timing“)

A lower dollar today, down to a point it has not reached since 2008, Bernanke said, is partly due to an unwinding of the safe haven effect that was seen during the height of the global economic crisis. This may be true, but Loesser says there is little compelling evidence that the dollar will begin to head up again, unless it does just for a short rally after QE2 is ended in June.

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Oil May Hit $150, Gold $2,000: Risk Assessor

Tuesday, 19 Apr 2011 | 5:38 AM ET
By: Antonia Oprita
Web Producer, CNBC.com

Oil prices are likely to hit $150 while gold may go above $2,000 longer term, Nick Bullman, a managing partner at research-based risk assessment service firm CheckRisk, told CNBC Tuesday.
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Update: Comex Gold Pokes Above $1,500 Amid Inflation, Geopolitical, Debt Concerns
http://www.kitco.com/reports/KitcoNews20110419AS_comex_update.html

Gold to break $2,000/oz barrier (Telegraph)

The price of gold will reach $2,100 an ounce within three years, analysts have predicted.

Gold to beak $2,000/oz barrier Photo: AFP/Getty

By Richard Evans 6:16AM BST 12 Apr 2011

23 Comments

The price of gold will reach $2,100 an ounce within three years and could rise to almost $5,000 by the end of the decade, according to a new report.

Rising demand for gold in China and India will drive the precious metal's continued bull run, analysts at Standard Chartered, the Asia-focused bank, predicted. They said low interest rates in America and a time lag before mines started supplying more gold would see the rally extend to at least 2014.

"Our base-case forecast is that prices rally to peak at an average of $2,107/oz in 2014, although our modelling suggests a possible ‘super-bull’ scenario of gold prices rallying up to $4,869/oz by 2020, should current relationships between Asian demand and gold persist," the analysts wrote.

The bank said there was a "powerful relationship" between income per head in Asian emerging markets and the gold price.

The report added: "We expect some headwinds for gold to come from higher US [interest] rates, but we find that the impact of higher rates is rather muted and we do not expect this to derail gold’s rally for now," they added. "More important, we believe, will be the impact of higher mine production. We expect a steady acceleration in mine-supply growth in the years ahead, which should overwhelm demand growth beyond 2014. Nevertheless, we expect an extended period of high gold prices."

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In a previous report, the analysts had predicted that average income per head in China and India would reach 30pc of the US level by 2030. "Under this scenario, and assuming that the relationship between rising income levels and gold holds, gold prices could reach $4,869 by 2020," the report said.

"On this basis, the bull run for gold could still be in its infancy. This is based on the assumption that the current relationship between gold and incomes persists through to 2020, which is considered possible, but unlikely."

The report concluded: "The bull run in gold is likely to continue for some time, but prices should peak around 2014 as supply finally catches up with demand and US real rates turn positive."

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‘Gold's advance to super cycle indicates demise of dollar, collapse of economy’ (IBT)

By Jijo Jacob | April 7, 2011 3:38 PM GMT

The runaway rise in gold prices is here to stay. And that is not just bad news to the U.S. economy. A sustained gold and oil boom indicates that the dollar is slipping into grave danger and the economy closer to collapse.

"... when these commodities go up in price it is a sign that the U.S. dollar is dying and that our country is getting closer to economic collapse," Michael Snyder wrote in Daily Markets on Thursday.

In simple words, the gold and silver boom indicates that investors everywhere in the world are losing trust in the dollar and the U.S. government treasuries. And they seek out something they can trust more.

A Standard chartered Bank report on Thursday said dollar will further weaken against the Chinese yuan and Indian rupee.

Synder blames the quantitative easing for the loss of dollar value. He says the policy of pumping huge amounts of money into the financial system is highly inflationary and a form of cheating.

more...

Gold Could Gain 30% by Year-End: Fund Manager (CNBC)

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Gold likely to climb as unrest in Middle East fans demand (Economic Times)

LONDON: Gold may gain in London , extending the longest streak of quarterly gains in more than three decades, as fighting in Libya and concerns about European debt spur demand for an alternative investment. 

US political and military leaders said they're unwilling to start providing arms for Libyan rebels as Muammar Gaddafi's troops regained the upper hand. Ireland's central bank instructed four lenders on Thursday to raise 24 billion euros ($34 billion) following stress tests. 

Gold reached a record $1,447.82 an ounce on March 24 as fighting in Libya, the Japanese nuclear crisis and concerns about European debt boosted demand. Gold is supported "on the back of expectations that the military intervention in Libya will prove to be a prolonged affair, coupled with the renewed concerns over the sovereign debt problems in Europe," Marc Elliott , an analyst at Fairfax IS in London, said in a report. 

Immediate-delivery bullion rose 95 cents, or 0.1%, to $1,433.25 an ounce by 11:34 am in London. Prices gained 0.8% this year through March and climbed the past 10 quarters, the best run of gains since 1979. Gold for June delivery was 0.4% lower at $1,434.60 an ounce on the Comex in New York . Bullion fell to $1,434.50 an ounce in the morning "fixing" in London, used by some mining companies to sell output, from $1,439 at Thursday's afternoon fixing. 

Ratings Cut 

Standard & Poor's cut credit ratings for Greece and Portugal this week. Irish central bank Governor Patrick Honohan said he expects that the two of the country's six domestic banks that aren't already owned by the government will fall under state control. 

Uncertainty surrounding Libya and European sovereign risk, including Ireland, "encouraged gold safe-haven buying," Mark Pervan, head of commodity research at Australia & New Zealand Banking Group, wrote in a report on Friday. 

Eleven of 25 traders, investors and analysts surveyed by Bloomberg, or 44%, said that bullion will rise next week. Nine predicted lower prices and five were neutral. Sales of American Eagle gold coins fell 21% to 73,500 ounces in March, the lowest level since December, according to the US Mint's website. 

Coin Sales 

Silver Eagle coin sales declined 15% to 2.767 million ounces last month, also the lowest level since December, the data show. Sales averaged 2.89 million ounces in 2010. Silver has outperformed other precious metals this year. 

Silver for immediate delivery was little changed at $37.615 an ounce. It reached $38.165 on March 24, the highest level since February 1980, the year the metal reached a record $50.35 in New York. Prices gained 22% in the three months through March, a ninth straight quarterly advance and the best run of gains since at least 1950. 

Palladium was up 0.5% at $767.50 an ounce, and fell 4.8% last quarter. Platinum gained 0.2% to $1,771 an ounce, after declining 0.1% last quarter. Platinum and palladium are used in pollution-control devices in automobiles.


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