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Gold to clear $2,000 in 2012 as rally cools: LBMA poll

(Reuters) - Gold's rally will extend beyond $2,000 an ounce in the next year, but won't match the record-breaking 50 percent surge of the last 12 months, according to an annual survey of gold investors and analysts at the world's biggest bullion traders event.

With no let up seen in the financial markets uncertainty that fanned the safe-haven investment spree, bullion is expected to rise to $2,019 an ounce by November 2012, according to an anonymous survey of delegates at the conclusion of the London Bullion Market Association's (LBMA) annual conference on Tuesday. That is about 12 percent above current levels.

If history is any guide, the consensus view from the biggest gathering of gold market traders, experts and users may prove too conservative -- for the past three years, prices have outpaced the survey. A year ago delegates predicted gold would rise to $1,450 in 12 months; on Tuesday it hit $1,800.

Most were optimistic on the outlook in spite of the past month's extraordinary volatility, which has caused some traders to question gold's credentials as a haven of stability. But few expect a repeat of the past year's torrid rally.

"We've heard so much about the perfect storm that has driven gold to where it is now, that the odds of it increasing a similar amount have to be a lot less," Robin Bhar, an analyst at Credit Agricole, told Reuters at the conference.

"There are good reasons why gold has been taken to where it has, but can we really assume that those factors are going to remain, for it to power on to $3,000, $4,000? We are assuming global GDP will grow and the fear factors will lessen, so there will be less reason to be owning gold."

Well over 500 analysts, traders, fund managers, refiners and miners, as well as official sector and wider industry delegates, attended the meeting, one of the most significant in the precious metals calendar.

Attendance at the meeting has swelled as gold has become an increasingly sought-after asset in recent years, with prices hitting a record $1,920.30 an ounce on September 6. They have since retreated, however, and are down 2.5 percent so far this month after a period of intense volatility.

The view was largely similar at a simultaneous conference of major gold miners halfway across the continent, in Colorado Springs, where executives from the likes of Newmont Mining Corp (NMC.TO) (NEM.N) and AngloGold Ashanti Limited (ANGJ.J) saw prices rising to $2,200 an ounce and beyond.

"I'm a big believer that all of the ingredients for a higher gold price are there: geopolitical risk, economic uncertainty, inflation," Yamana Gold (YRI.TO) Chief Executive Peter Marrone said on Monday. "It just seems natural to me for gold prices to go to substantially higher levels."

STRETCHED, BUT NOT TO BREAKING POINT

Analysts have suggested this volatility pointed to overstretched conditions, but delegates disputed that it marked the start of a deeper correction.

"The higher levels of volatility is a function of increased economic uncertainty... but it doesn't portend a reversal of the gold market," HSBC analyst Jim Steel, who has a 2012 gold forecast of $2,025 an ounce, said on the sidelines of the conference.

"The macroeconomic climate remains positive for gold. The fact that there's a high level of volatility in the market doesn't take away from its safe-haven status. You've got to look at it over time compared to paper assets. If it were treated as a currency, it would have outperformed every other currency in the last 12 months."

John Fallon, president of hedge fund Pia Capital Management, said gold is "in an orbit by itself" among commodities and remains his favorite investment in the sector, due to its high liquidity and the support offered by solid physical demand.

"Gold still has our undivided interest," he told Reuters at the conference. "We favor both the (gold) ETFs and the actual spot OTC market."

There were few outright bearish views.

Christoph Eibl, CEO and founding partner of the $2 billion Swiss commodity hedge fund Tiberius Group, was a rare voice of stern caution, warning that gold could fall back below $1,000 an ounce in line with production costs for miners.

But even Eibl, who considers himself a converted contrarian after years as an unabashed gold bug, wasn't prepared to bet big against bullion's newfound popularity.

"We know it's too dangerous to stand in front of a truck that may run you over," he said.

Unsurprisingly, delegates expected leading gold consumers China and India to remain main demand drivers for the yellow metal, with the World Gold Council estimating that Chinese demand could grow 10 percent this year.

Chinese consumers are willing to spend more on gold jeweler as product quality and disposable income increase, and due to the investment function of gold, Wai-Chan Chan, a partner at China's OC&C Strategy Consultants, said.

PLATINUM FAVORED

Among other precious metals, delegates forecast a platinum price of $2,163 an ounce in November next year, giving it a touch more upside than gold from its current price near $1,770 an ounce. Palladium was forecast at $826 an ounce, compared to its current $710.

Platinum group metals prices will have to rise, or the rand to weaken, to ease pressure on South African platinum miners, Aquarius Platinum chief executive Stuart Murray argued in a well-received presentation on Monday.

Once tax, royalties, costs and investments were taken care of, he said, shareholders and capital providers were seeing a return of less than 3 percent.

"The reality is that for us, for the risks that are taken, for the effort that goes into mining an ounce of platinum, returns greater than 3 or 4 percent are needed," he said.

Delegates forecast silver prices at $47 an ounce next year.

Silver was favored by Claymore Investments president Som Seif, who argued in a presentation on Monday that rising demand from the industrial and investment sectors and supply constraints argued for higher prices.

However, analysts said investors were likely to remain wary of silver after its sharp correction from record highs earlier this year. Prices lost a third of their value in the six trading sessions after they peaked near $50 an ounce in April.

Nonetheless, the Royal Canadian Mint said its silver bullion sales were on track for a 30 percent rise this year, taking them to 25 million ounces.
 
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Instrument Spread
EURUSD 0,6
USDJPY 0,9
GBPUSD 2
USDCHF 2
USDCAD 1,8
AUDUSD 1,2
NZDUSD 1,8
EURGBP 1,8
EURJPY 2,4
GBPJPY 3,2
AUDJPY 1,7
NZDJPY 2,8
CHFJPY 3
CADJPY 3
EURCHF 4
EURAUD 3
EURCAD 4
GBPCHF 6
GBPCAD 5
GBPAUD 5
GBPNZD 10
AUDNZD 7
AUDCHF 4
USDMXN 150 :)cgrock
 
Natural Gas July (06/25/09@2:30pmEST) 0,01
Natural Gas Aug (7/29/09@2:30pmEST) 0,01
Natural Gas Expiring 0,002
Soybeans May(04/22/09@2:15pmEST) 0,04
Soybeans July (6/22/09@2:15pmEST) 0,04
Soybeans Expiring 0,005
US DJ 30 Mar (03/19/09@4:00pmEST) 10
US DJ 30 June (06/19/09@4:15pmEST) 10
US DJ 30 Sept (09/18/09@4:15pmEST) 76
US DJ 30 Expiring 2
US SP 500 Dec (12/18/08@4:15pmEST) 0
US SP 500 Mar (03/19/09@4:15pmEST) 1
US SP 500 June (06/19/09@4:15pmEST) 1,18
US SP 500 Sept (09/18/09@4:15pmEST) 1,18
US SP 500 Expiring 0
US NASQ 100 Mar (03/19/09@4:15pmEST) 2
US NASQ June (06/19/09@4:15pmEST) 2
US NASQ Sept (09/18/19@4:15amEST) 1,75
US NASQ Expiring 0,5
USD Index 0,05
Russell 2000 Dec (TFZ8) 0,05 :)cgrock
 
UK 100 Mar (03/20/09@5amEST) 5
UK 100 June (06/19/09@5amEST) 5
UK 100 Sept (09/18/09@5amEST) 1,5
UK 100 Expiring 1
UK 100 Sept / USD 5
Germany 30 Mar (03/20/09@7amEST) 5
Germany 30 June (06/19/09@7amEST) 5
Germany 30 Sept (09/18/09@7amEST) 1
Germany 30 Expiring 0,5
Germany 30 Sept / USD 5
France 40 Jan 1/16/09@10amEST 7
France 40 Apr (04/17/09@10amEST) 7
France 40 May (05/15/09@10:00amEST) 7
France 40 Expiring 0,5
France 40 Aug / USD 0
Switzerland 30 June (06/19/09@3amEST) 8
Switzerland 30 Expiring 2
Switzerland 30 Sept / USD 8
Japan 225 June(06/11/09@4:15pmEST) 30
Japan 225 Sept(09/10/09@4:15pmEST) 10
Japan 225 Expiring 5
Taiwan Index Oct (STWV8) 0,2
Taiwan Index Nov (STWX8) 0,5
US 10yr Sept (08/27/09@3pmEST) 0,1562
US 10yr Expiring 0,03125
US 30 Yr June (05/27/09@3pmEST) 0,1562
US 30yr Sept (08/27/09@3pmEST) 0,1562
US 30yr Expiring 0,03125
Hang Seng Index July (7/30/09@4:30amEST) 0
German Bund Dec (FGBLZ8) 0,05
German Bund Mar (FGBLH9) 0,05
German Bund (USD) 0,01
DAX 30 (USD) 0,1
CAC 40 (USD) 0,1
Swiss Market Index (USD) 0,1 :)
 
IBEX 35 (USD) 1
SPI 200 (ASX) (USD) 1
UK 100 (M2)/USD 0,5
Germany 30 (M2)/USD 0,5
Spain 35 (M2)/USD 0
German Bund (M2)/USD 0,05
France 40 (M2)/USD 0,5
Switzerland 30 (M2)/USD 5
France 40 Expiring/USD 0
UK 100 Expiring/USD 0,5
SWISS30/USD 5
DAXX30/USD 0,5
3M Company (MMM) 0,01
Adobe Systems (ADBE) 0,17
Alcoa (AA) 0,05
Altera Corporation (ALTR) 0,03
Altria Group (MO) 0,01
Amazon.com Inc (AMZN) 0,26
American Express Co (AXP) 0,01
AMGEN (AMGN) 0,01
Apple Computer Inc (AAPL) 0,03
Applied Materials (AMAT) 0,02
AT&T Corp (T) 0,05
Bank of America (BAC-XNYS) 0
Boeing Co (BA) 0,01
Bristol Myers Squibb (BMY) 0,07
Caterpillar (CAT) 0,01
Cisco Systems (CSCO) 0,03
Citigroup Inc (C-XNYS) 0,01
ConocoPhillips (COP) 0,05
Coca Cola Company (KO) 0,01
Dell Computer (DELL) 0,01
Delta Airlines (DAL) 0,01
Disney (DIS) 0,02
eBay Inc (EBAY) 0,01
EMC Corp (EMC) 0,01
Exxon-Mobile (XOM) 0,01
Freeport McMoran (FCX) 0,01
General Electric (GE) 0,01
Goldman Sachs (GS) 0,01
Google Inc (GOOG) 0,18
Halliburton (HAL) 0,01
Hewlett-Packard (HPQ) 0
Home Depot (HD) 0,01
IBM (IBM) 0,06
Intel Corp (INTC) 0,01
 
JDS Uniphase (JDSU-XNAS) 0,03
Johnson & Johnson (JNJ) 0,01
JPMorgan Chase (JPM) 0,03
McDonald's (MCD) 0,14
Microsoft Corp (MSFT) 0,01
Monsanto (MON) 0,35
Las Vegas Sands Corp (LVS) 0,03
Morgan Stanley (MS) 0,01
Motorola Inc (MOT-XNYS) 0,05
National Semiconductor (NSM) 0,01
Newmont Mining (NEM) 0,01
Oracle Corp (ORCL) 0,01
Pfizer Inc (PFE) 0,01
Potash (POT) 0,03
Qualcomm Inc (QCOM) 0,04
Qwest Communications (Q-XNYS) 0,07
Research in Motion (RIMM) 0,01
Sun Microsystems (JAVA-XNAS) 0,02
Symantec Corp (SYMC) 0,04
Target Corp (TGT) 0,01
Ternium S.A. ADS (TX) 0,09
Texas Instruments (TXN) 0,06
Time Warner Inc (TWX) 0,01
United Technologies Corp. (UTX) 0,01
United States STL Corp New (X) 0,05
Verizon Communications (VZ) 0,01
Yahoo Inc (YHOO) 0,01
Barclays Plc (BARC-XLON) 0,0025
BP PLC (BP-XLON) 0,01
Invensys Plc (ISYS-XLON) 0,0025
J Sainsbury Plc (SBRY-XLON) 0,01
Marks & Spencer Plc (MKS-XLON) 0,0025
Prudential Plc (PRU-XLON) 0,005
Rolls-Royce Group Plc (RR-XLON) 0,0025
Royal and Sun All. Ins. Group (RSA-XLON) 0,005
Tesco Plc (TSCO-XLON) 0,0025
Unilever Plc (ULVR-XLON) 0,01
Vodafone Group (VOD-XLON) 0,003
BP Plc (BP-XLON)(DISCARDED) 0,01
BARCLAYSUSD 1E-04
ROYAL&SUN_ALL_INS_GRUSD 1E-04
INVENSYS PLCUSD 0,0001
VODAFONE GROUPUSD 1E-04
UNILEVER PLCUSD 0,001
PRUDENTIAL PLCUSD 1E-04
MARKS SPENCER PLCUSD 0,0001
 
J SAINSBURY PLCUSD 1E-04
ROLLS-ROYCE GRP PLCUSD 1E-04
TESCOUSD 1E-04
Allianz AG (ALVG-XETR) 0,03
AXA SA (AXAF-PAR) 0,02
BASF AG (BASF-XETR) 0,02
Bayer AG (BAYG-XETR) 0,05
Bayerische Hypo (HVMG-XETR) 0,07
BMW AG (BMWG-XETR) 0,03
Commerzbank AG (CBKG-XETR) 0,02
Daimler AG (DAI-XETR) 0,03
Deutsche Bank (DBKGn-XETR) 0,04
Deutsche Lufthansa (LHAG-XETR) 0,02
Deutsche Telekom (DTEGn-XETR) 0,02
E ON AG (EONG-XETR) 0,3
Ericsson (ERICb-XOMX) 0,02
France Telecom (FTE-XPAR) 0,03
Infineon Tech AG (IFXGn-XETR) 0,02
ING Groep (INGA-XAMS) 0,02
Royal Dutch Petroleum ((RDSA-XAMS) 0,02
RWE AG (RWEG-XETR) 0,05
SAP AG (SAPG-XETR) 0,02
Siemens AG (SIEGN-XETR) 0,05
ThyssenKrupp AG (TKAG-XETR) 0,02
Volkswagen AG (VOWG-XETR) 0,2
DAIMLERCHRYSLER AG/USD 0,05
ING GROEPUSD 0,05
BAYERISCHE HYPOUSD 0,05
SIEMENS AGUSD 0,05
AXA SAUSD 0,05
FRANCE TELECOMUSD 0,05
E ON AGUSD 0,05
THYSSENKRUPP AGUSD 0,05
VOLKSWAGEN AGUSD 0,05
DEUTSCHE TELECOMUSD 0,05
BAYER AGUSD 0,05
DEUTSCHE LUFTHANSAUSD 0,05
INFINEON TECHUSD 0,05
RWE AGUSD 0,05
SAP AGUSD 0,05
DEUTSCHE BANKUSD 0,05
BASF AGUSD 0,05
ALLIANZ AGUSD 0,05
ROYAL DUTCH PETUSD 0,05
COMMERZBANK AGUSD 0,05
BMW AGUSD 0,05 :)cgrock
 

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