Analyst predicts the price will reach $2,300 per ounce

Market analyst Ronald Stoeferle at Erste Group recently released a comprehensive report on Gold’s value and a forecast. Stoeferle suggests that the fourth quarter of 2012 could be extremely positive for the yellow metal; he predicts the price will reach $2,300 per ounce. Stoeferle said, “Due to its high liquidity and unique characteristics, Gold is becoming ever more prominent as collateral. Therefore, we are currently seeing the renaissance of Gold in international finance. The foundation for a return to ‘sound money’ has been laid.” He added, “Gold is now officially again ‘as good as Gold’ and ranks on the same level as cash. We expect this decision to have a wide range of implications. For example, the opportunity cost of holding Gold will be reduced massively.”

One American consumer sentiment index fell to its lowest point this year with an unexpected decline to 72 in July, compared with June’s reading of 73.2. Reasons include one of the weakest quarters in corporate hiring in two years and an unbalanced stock market that is attached to the ongoing European debt crisis. Sean Incremona at 4Cast Inc. said, “We could continue to see a fairly mild trend in consumer spending. Employment is the main factor that’s really keeping the consumer underweight at this point.”

At 1:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,592.70, Up $25.80.
  • Silver, $27.44, Up $0.20.
  • Platinum, $1,431.70, Up $19.20.
  • Palladium, $587.00, Up $11.20.
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Record stimulus in Europe pushes euro and Gold down, dollar up

The euro fell to a four-week low against the dollar today, held down by a record low interest rate from the European Central Bank and a rise in the value of the dollar brought on by a report that showed more American jobs were created in June than previously thought.  While the unemployment rate usually has little to no correlation to the value of the dollar, this particular announcement eased expectations that the Federal Reserve will embark on further stimulus measures.  This, in turn, lowered inflation fears, leading to a rise in the dollar.  Almost the opposite was true in Europe, where stimulus measures are fanning the flames of inflationary fears.

Retail sales and service sector growth data both came in lower than expected by analysts, adding to the pessimism about the direction of the American economy.  Erik Johnson, U.S. economist at IHS Global Insight, cited the stronger dollar as one cause of the slowdown, pointing to lower exports as the driver of slower growth.  “While the euro-zone recession intensifies, export orders should continue to suffer, especially as stronger demand for the dollar leaves U.S. businesses less competitive in external markets,” Johnson said.  Market Watch quoted a wholesale-trade purchasing manager as saying, “Business is still growing, but there has been a definite slowing in growth.”

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

  • Gold, $1,606.20, Down $17.10.
  • Silver, $27.72, Down $0.64.
  • Platinum, $1,475.80, Down $14.10.
  • Palladium, $586.50, Down $13.40.
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