The FCF Group: - Outlook for Gold Very Positive for Rest of 2012

Fitch Commodity Futures Group (The FCF Group) Chief Executive George Parsons said that continuing global financial worries could push gold prices above $2,000 an ounce this year.

New York, NY, August 10, 2012 --( Parsons is predicting that the gold price will move in a range between $1550 and $2025 with a year-end price of $1900. This is very much in the conservative mid range of most other forecasters and analysts.

Parsons believes the US dollar will be a bullish factor for gold as it is fundamentally overvalued (specifically against the Yuan and associated currencies of the Far East), and should decline which will be quite bullish for gold.

The other key bullish factors, as he sees it, have not changed. Record government debt levels, slow growth/recession, and a drift in much of the OECD towards deflation continue to force economic stimulus on the shoulders of central banks. The ECB and other central banks will maintain extremely loose monetary policies throughout 2012 and the Fed will be forced to introduce QE3. The monetary reflation factor alone could be enough to see gold rise well above $2000.

Other factors should continue to favor gold in 2012, including central bank gold demand, which should add to demand for years to come, and geopolitical turmoil in the Middle East and elsewhere. The latter will cause surges in the gold price, surges likely also to be reflected in the oil price.

In short, Parsons believes, the rest of 2012 will be somewhat like quarters 3 and 4 in 2008 and be a contest between recession and monetary reflation. He is forecasting reflation will win the day for gold.

Indeed, Parsons’ outlook and the general consensus among bank analysts are very similar and actually remarkably positive for the yellow metal looking ahead contrasting with mostly exceedingly cautious predictions in the past.

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