TMM will trend higher as Gold trends higher Market Nuggets: BNP Paribas: ‘We Expect Gold To Trend Higher’ Over Next Year
Wednesday October 3, 2012 12:47 PM
BNP Paribas looks for gold to continue working its way high over the next year, with monetary policy likely to be the key influence. Prices rose sharply since mid-August on expectations for more Federal Open Market Committee easing followed by actual accommodation. “The FOMC commitment to open-ended quantitative easing is taking it one step further than previous instances of QE, as there is no timeline for the end of bond buying,” says senior precious metals strategist Anne-Laure Tremblay. “This is most definitely positive for gold. On the other hand, inflationary pressures have subsided, particularly in China, and should have less sway on gold prices.” In an updated forecast, the bank says it looks for gold to average $1,795 in the fourth quarter, $1,865 in the first quarter of 2013 and $1,900 in the second. “We continue to believe that the direction of the gold price will be tightly linked to monetary easing,” Tremblay says. “In the next 12 months, we expect gold to trend higher. The outlook beyond this timeframe will greatly depend on economic conditions, and particularly on any improvement in the U.S. jo