Standard bank lowers it’s gold price forecast to $1780/oz

Standard Bank has said it lowered its average 2012 Gold price forecast by 6 percent to $1,780 an ounce, but continues to expect prices of the precious metal to touch new highs in the latter half of this year.

“We maintain that gold will reach new highs this year but, given our dollar view, we believe that these highs will be reached only in the second half of 2012,” the analyst said in a note. Standard Bank expects the U.S. dollar to gain strength, especially against the euro, over the next quarter.

A few other banks have recently lowered price forecasts for gold, including ANZ and Credit Suisse – however the majority remain bullish on gold’s outlook for 2012.

Production

The world’s biggest primary Silver miner, Fresnillo, had flat silver production in 2011. Output is only expected to remain stable in 2012.

African Barrick Gold said on Wednesday fourth quarter gold production fell 11% and missed its annual production targets.

Despite price rises seen in 2011, Gold and Silver mining is remaining static contrary to claims by gold bears that higher prices would Lead to increased production and therefore increased supply.

Geological constraints may be impacting mining companies ability to increase production of the precious metals.

India Tax hike

India raised its tax on imports of gold bars and coins (2%) and silver (6%) yesterday. This is a 90% increase on gold and double the previous amount charged on silver. Traders and analysts do not think that the increase will have an effect on the strong demand from Indian consumers. The increase in duty is not that large in rupee terms given the strong rise of gold in rupees in recent years.

Current weakness in the market provides another buying opportunity and is a good time to accumulate a position for the long term.

Source: goldcore

Tags: Gold analysis, gold forecast, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price 2012, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Jan 20 2012. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry