Wednesday, April 8, 2009

Today in Gold: Wednesday, April 8

Each weekday, Cash4Gold will troll through the web's gold banter and post some of the bigger or more interesting stories. Following is a run-down of today's features:

"JPMorgan hikes 2009, 2010 gold, silver price views"
Author: Jan Harvey

Main Points: JPMorgan shifted its forecasts for 2009 and 2010 gold prices dramatically, citing a weakened dollar and inflationary concerns -- both conditions that benefit the price of gold.

JPMorgan's projections were moved from $831 to $960 in 2009 and $825 to $950 in 2010.

"Investment demand continues to act as an offset, to some degree, to a very weak physical market in precious metals, gold in particular," the bank said.

"Inflation and / or U.S. dollar weakness do however need to materialize to justify gold above $1,000. In the meantime, the threat of these factors will support prices."

Analysis: Quite the shift. We've seen some minor adjustments from economists and banks alike (both up and down), but this may be the most dramatic yet. It's also a curious shift, given much of the chatter recently has been for more conservative expectations, limited largely by the declining demand for gold in retail.

"Gold May Extend Gains on Renewed Investor Concern Over Economy "
Author: Glenys Sim

Main Points: Gold had little movement on Wall Street today, hovering around the $880 an ounce mark. Gold's immobility did little to dampen the enthusiasm of some investors, however.

"We still see systemic risk in the financial system," said Walter de Wet, head of commodity research at Standard Bank Plc. "We also expect physical demand for gold to rise at these price levels, which should support the gold price."

Bloomberg also cited the GFMS analysis that we quoted yesterday, indicating gold prices may well exceed $1,000 an ounce again soon.

Analysis: The analysis certainly goes in waves. As soon as it seems everyone has an aggressive outlook on gold, investors express caution. Once caution takes over as the majority opinion, stories like GFMS and JPMorgan surface.

If anything, it would seem that gold is a safe buy right now following a relatively abrupt fall from the $950-$1,000 an ounce range. Whether gold again approaches those numbers soon remains up for debate.

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