Bullion Association Forecasts Gold Average at $1,219

Gold will average $1,219 an ounce this year and gain as much as 10 percent from now, after posting its biggest annual decline in three decades, a London Bullion Market Association survey of traders and analysts showed.

The metal will reach $1,379 and trade above $1,067 through December, the mean response of 28 participants shows. Prices slumped 28 percent last year, the most since 1981, and averaged $1,411, the least in three years. Silver will rise as much as 19 percent to $23.94 an ounce by December, platinum 13 percent to $1,650 an ounce and palladium 16 percent to $863.21 an ounce, the LBMA said today in an e-mail.

Bullion declined for the first time since 2000 and more than $73 billion was erased from the value of gold-backed funds last year as some investors lost faith in the metal as a store of value. The Federal Reserve said Dec. 18 it will trim monthly bond purchases to $75 billion from $85 billion, easing concern about faster inflation. As prices fell in December toward a 34-month low set in June, demand for jewelry, coins and bars increased.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza