Bullish....Gold report Strategists at Capital Economics gave Europe's debt situation as one reason to expect gold buying to pick up. They said they expected the metal to reach a record $2,000 an ounce this year, also aided by supportive global monetary policy and a fading equity rally.
"An extended pause is not a sufficient basis for arguing that the bull market is over," they said.
Factors that have recently undermined gold of late include speculation of smaller asset purchases from the U.S. Federal Reserve, less demand for safe havens and a strong performance for income-paying assets such as equities, they noted.
However "we don't expect these headwinds to persist throughout 2013," they said, noting that the U.S. monetary base will still expand rapidly even if the Fed does scale back on asset purchases soon.
In addition, the crisis in the euro zone will probably flare up again later in the year, they said. Meanwhile, sharper volatility in equity markets from current unusually low levels, especially if it's caused by a sharp selloff, "should revive the safe-haven demand for gold."