Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rebounded 0.5%, reclaiming the psychologically-important $1,700 level, on safe-haven buying after the ECB's Mario Draghi cut his growth forecast for 2013. Speaking in Frankfurt, Draghi said eurozone GDP will shrink by 0.5% next year, more than previous expected. He left the door open for further cuts in interest rates and other forms of monetary stimulus, including QE-styled OMTs, to help lower borrowing costs. Additional easing is bullish for gold because it raises the long-term risk of inflation. Bargain-hunters also helped to bid up the gold price after Tuesday's 1.5% technical sell-off. The dollar rose on the ECB news, pressuring gold's gains. Silver gained by 0.5% while sister metals platinum and palladium jumped by 1% and 1.4%, respectively.

At the Comex close: February gold gained $8 to $1,701.80; March silver added 16 cents, to $33.11; January platinum climbed 16.50 to $1,600.70; and Mach palladium jumped $9.60 to $697.05 an ounce.

Morgan Stanley called gold their top pick for 2013 today, forecasting an average price of $1,853 next year. The investment giant sees the bull market expanding because of monetary policies weakening the dollar, euro, and other currencies; growing demand from global Central Banks, especially in emerging markets; record-high purchases in bullion-backed ETFs; and a resumption of demand in the jewelry and investment markets of India, historically the largest gold consumer in the world. Deutsche Bank is similarly bullish, saying that it expects gold prices to push $2,000 next year, mainly because of further global monetary easing.