Tags: Gold | bulls | given | up

Gold Bulls Haven’t Given Up the Ghost

Monday, 28 Jan 2013 08:52 AM

By Dan Weil

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Gold may have dropped 8 percent from its early October highs, but a number of market participants believe the precious metal can get its mojo back.

Gold hit a record high of $1,921 an ounce in September 2011 and has advanced for 12 years in a row. But late Friday it traded at $1,658.

The precious metal has lost its allure as a safe haven amid the stabilization of Europe’s financial system and the U.S. economy’s continued recovery.

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But bulls still see points in gold’s favor, The Wall Street Journal reports.

For example, central banks bought 536 more tons of gold than they sold in 2012, the highest total in 48 years, according to GFMS, a London-based precious metals consulting firm. It forecasts net central bank purchases of 280 tons for the first half of this year.

Meanwhile, output from gold mines climbed only 0.2 percent in 2012, to 2,842 tons, the smallest growth rate in four years.

“We're feeling pretty bullish on gold, and consider those long-term fundamental drivers that have been supporting the market still very much intact," David Donora, head of commodities at Threadneedle Investments, tells The Journal.

Not everyone shares his optimism.

“The economic conditions are looking up, so people are rethinking their investments in gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, tells Bloomberg. “Equities seem more remunerative than gold at the moment.”

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

© 2014 Moneynews. All rights reserved.

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