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Gold can still break $2,000, analysts tell CNBC - Wealth Management

January 07,2013


Commerzbank exec sees "very positive environment" for bullion

The price of gold may have come under increasing pressure in past weeks with concerns that the Federal Reserve's loose monetary policy may be coming to an end, but analysts have told CNBC that the precious metal can still break through the $2,000 mark in the long term.

"We're in a very good situation. QE (quantitative easing) is going to go for six to 12 months. They are talking about $500 billion to $1 trillion more in the system," Eugen Weinberg, head of commodity research at Commerzbank told CNBC Monday.

Record low interest rates by central banks around the globe have resulted in negative real interest rates -- when allowing for inflation. Traditionally gold has an inverse relationship to interest rates and is used as a hedge against inflation, which can occur as a result of monetary stimulus.

"So a very positive environment for gold," Weinberg said. "But for now the demand for safe haven is not there so probably even the professional buyers are going to be keeping off the market. But longer term we forecast the prices to rise above $2,000."



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