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Gold and Precious Metals Surge

Corolla Financial analysts predict a continuing run for precious metals: Gold could reach as high as $1950 and silver could break $40

 
PRLog - Sep. 14, 2012 - TOKYO, Japan -- As the Federal Reserve launched a stimulus package, and the Euro strengthened to the dollar this week, gold surged Thursday approaching its annual high. Precious metals made significant gains towards the end of the day Thursday after the US Central Bank announced that it would buy forty billion dollars of mortgage-backed debt each month until the United States job outlook improved. Shifting their focus from stability to employment meant a surge in precious metals as a hedge against potential inflation.

The shift in focus towards job creation means less emphasis on containing inflation which is good news for gold and precious metals. Spot gold hit a high of $17,772.26 Thursday taunting the annual high set in February of $1790. Corolla Financial analysts believe that gold and silver will continue to rally through the end of the year. Silver which rallied more than 4% Thursday will likely be more volatile in the coming months than gold, but will likely march past its annual high and surpass $35 in the short term. Silver could easily exceed the $40 barrier in the coming months on momentum, but it will encounter strong resistance around $38.

The Fed announced that their most recent round of bond-buying is open-ended and the low interest rates will remain low through the middle of 2015. They had previously stated that interest rates would likely rise in 2014 and the pushing back of this guidance will enable a longer run for gold, silver and other precious metals. This inflationary action would be bearish for the dollar and further decline in the currency is expected driving investors to precious metals for protection against the declining currency.

Corolla Financial analysts expect the precious metal surge to continue and for gold to exceed $1800 by the end of October. Based on current circumstances and trends, it is possible for gold to reach as high as $1950 by years end.

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Source:Corolla Financial
Location:tokyo - tokyo - Japan
Industry:Business
Tags:gold, silver, federal reserve
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