Instead of a multi-year downtrend, with disinvestment putting pressure on precious metals prices over time, many of the variables that drive gold prices (lower in 2013) have already reset to an extent,” says Nomura.
The Japanese financial holding company boosted its gold target to $1,335 this year (it’s at $1,338 right now) and $1,460 in 2015 from $1,138 and $1,200, respectively. Silver’s target is raised to $21.52 from $16.25 (silver’s at $21.21 right now).
ETF outflows are slowing, speculative short positions have cooled, and producers are cutting back new projects. “Long-term demand support from Asian nominal income growth, an evolving post-QE macroeconomic environment and lower disinvestment potential move our gold equilibrium model to now expect price increases over the next three years.”The team also has a variant take on what might have caused last year’s big decline in price, attributing it maybe to an arbitrage opportunity between Chinese and London pricing. “The potential for such negative supply swings has far less potential impact than in late 2012.”
Gold futures closed 1% lower on Friday, suffering from their biggest one-day point and percentage loss in more than a week, after a closely-watched jobs report signaled stronger-than-expected employment trends, dulling the metal’s investment appeal. Gold for April delivery fell $13.60, or 1%, to settle at $1,338.20 an ounce on the Comex division of the New York Mercantile Exchange. For the week, prices held onto a gain of around 1.3%.
Generally, trend remains up.