Gold News & Info

Source: American Gold Exchange

Austin— Gold dropped slightly for the second consecutive day after gaining 3.2% last week in a four-day winning streak that ended on Friday. Assurances from German Chancellor Angela Merkel and French President Nicolas Sarkozy that the Greek bond "haircut" was unlikely to be repeated in other ECU nations helped to reassure investors and buoy the euro, reducing safe-haven demand for gold. The comments also weakened the dollar, providing some price support for gold and keeping it above $1,600 an ounce. At Comex close: February gold declined $8.70 to $1,608.10; March silver added 10 cents to $28.78; March palladium added $3.85 to $617.85; April platinum gained $21.40 to $1,429.60 an ounce.

Two of the world's largest investment banks stated today that they expect big gains in the gold price over the next twelve months. Goldman Sachs head of commodity research, Jeffrey Currie, reaffirmed at the firm's Strategy Conference in London today that gold prices could hit $1,940 an ounce this year, and even higher if inflation builds. And Morgan Stanley emailed a report to investors predicting that the gold price could average $2,200 an ounce. Gold is a top recommendation at both investment houses.

Low interest rates, the potential for further monetary easing by both the Fed and ECB, and the unfolding debt crisis in Europe are the stated reasons why gold prices will climb this year. �Our view on gold is driven by our view on underlying real interest rates,� Currie said in an interview at the conference. He added that investors seeking a hedge against Europe's debt crisis will flock to gold, as will central banks in emerging economies. Morgan Stanley's chief economist, Vincent Reinhart, made a very specific prediction about another round of Fed quantitative easing: " we believe that a package of Treasury and MBS purchases of $500-750 billion will arrive some time between March and June". QE3 is expected to support higher gold in the U.S., as will central bank purchases of debt in Europe.