Editor’s Note: Prices for many precious and base metals hit record highs in 2010, as economic uncertainty rattled around the globe. What does 2011 hold for gold, silver, platinum, palladium, copper and other metals? Kitco News reporters have prepared a series of stories which examine what is in store for 2011, not only for metals but for currencies, stocks and the overall economy. These stories will be posted on Kitco.com during the holiday period and also will be featured in a special section. Stay tuned for video highlights as well.
(Kitco News) - The 2011 gold outlook from most analysts, simply put, is higher.
But for new investors wanting to join the gold rush, there is still some homework to do. They might want to familiarize themselves with the many ways in which they can invest--from coins to exchange-traded funds to mining stocks--to decide which are most suited for them.
Gold has been in a decade-long bull market, rising from roughly $250 an ounce to a recent record of $1,431. Many look for still more gains. BNP Paribas has forecast an average of $1,500 in 2011, while Goldman Sachs has a 12-month target of $1,690 (but also cautioned that gold could peak in 2012).
Gold is likely to benefit as the U.S. dollar loses purchasing power due to factors such as spending deficits and a rising debt load, said Jeff Clark, editor of Casey Research’s Big Gold newsletter. “Gold is priced in U.S. dollars. So as the dollar loses value, gold must go up almost by default.”
The metal has been viewed as the “ultimate currency,” often rising even on days when the dollar strengthens, said Bill O’Neill, one of the principals with LOGIC Advisers. This frequently occurs when European debt concerns rattle investors.
“There is no great desire from large investors in particular to hold any currency,” said O’Neill, who looks for $1,600 gold next year. Many central banks are adding gold to their reserves, he said. Also, governments and central-bank moves to pump money into the economy have fueled fears of inflation, which supports gold.
Just as investors should diversify overall portfolios, Clark and O’Neill suggested some diversification for the portion in gold, since there are pluses and minuses for each alternative.
Coins Among Easiest Ways To Invest In Gold
“Owning one-ounce coins, especially the popular versions, are the easiest and simplest and perhaps the best protection you can have for what gold is designed to do,” Clark said.
Widely recognized bullion coins can be bought and sold readily, O’Neill said. They can also be easily stored someplace such as a safe-deposit box.
Some may prefer bullion bars, which can be cheaper than coins per ounce. However, most investors then take on storage costs. Also, there is the chance potential buyers may question the authenticity. To avoid this, Clark recommended bars stamped by reputable refiners.
Holding physical gold is not risk-free. “One of the issues is security,” said Jeffrey Christian, managing director of CPM Group. Risks include theft or a catastrophe that destroys one’s home. Investors can purchase a safe or store metal elsewhere, such as a vaulted service or depository.
Such decisions could hinge in part on why an investor buys gold in the first place. Those who fear a complete financial or political apocalypse may want the gold in their possession.
O’Neill cautioned that coin buyers understand the difference between bullion coins, in which the value is based mainly on the gold content, and numismatic coins, in which a higher cost is also based on scarcity, beauty and other factors that increase demand among collectors. Investors can make money on numismatic coins but it takes extra expertise.
Exchange-Traded Products Rapidly Grow In Popularity
A new form of gold investment rapidly grew since its advent in the last decade—ETFs. There are many around the world, but they are largely based on the same concept. Metal is put into storage to back shares that trade like a stock but track the price of the commodity, minus a management fee. This lets investors quickly participate in the market without incurring costs such as assaying, storing or insuring metal.
ETFs let investors buy into the gold market in smaller increments than might be the case for other alternatives, said Bart Melek, global commodity strategist with BMO Capital Markets. Yet, some of the largest hedge funds in the world also use ETFs.
One concern might be if a company holding an ETF’s gold should fail, Clark said. Also, in the event of a big price break, there is potential for ETFs to decline at a rapid pace, similar to the futures markets, O’Neill said.
Virtually no ETFs give investors access to physical metal, as they do with coins. “What you’re buying with an ETF is exposure to the gold price,” Christian said. “There’s a big difference.”
Futures Markets Offer High Returns But Great Risk
Futures contracts are agreements to buy or sell a commodity at a specified price at a later date.
These markets are highly leveraged, with only 5% to 15% of the total value needed to be put in as collateral. Moves in favor of a trader’s positions can make a lot of money, but moves against could mean not only does the trader loses his principal, but he could be responsible for an entire loss.
“If you’re not used to trading futures in general, I would tend to shy away from it,” O’Neill said.”Futures are not for people who are risk-averse.”
Mining Stocks Often Move More Than Gold
Analysts say stocks of mining companies often outperform gold in bull markets. For starters, as gold rises, so do company earnings. A producer’s stock will fare even better if the company can hike output during high prices.
“Quite a few of them are now paying a dividend, especially senior producers, so you’re also getting a yield,” Melek said.
However, analysts said, mining shares also tend to fall faster than gold in bear markets.
Gold producer stocks have other risks. Gold might rise, but the company fails to meet production targets due to a strike or flood, or have high mining costs. Depending on location of mines, there might also be a political risk to output.
Clark encouraged diversification within mining stocks. “You can own several companies, or the easy, couch-potato way to do it is to own a (gold) mutual fund.”
Gold-Jewelry Investment Value May Vary By Region
In some Far and Middle East nations, denizens buy gold jewelry as an investment just as much as adornment. There tends to be a low mark-up above the value of the gold, in part because of low labor costs there, Melek said.
In the Western world, however, jewelry often has a mark-up well above the value of the gold, meaning most buy it for beauty and to wear rather than make money reselling it.
“You’ve found people in the last few years who were shocked because they went to sell their gold jewelry and found out the gold content was a third of the value of the jewelry itself,” Christian said.
Gold demand in the third quarter of 2011 reached 1,053.9 tonnes, an increase of 6% compared to the same period last year. This equates to US$57.7bn, an all-time high in value terms.
According to the World Gold Council’s Gold Demand Trends report for Q3 2011 released today, this increase was driven by investment demand which rose by 33% year-on-year to 468.1 tonnes, generating record quarterly demand of US$25.6bn.
The report also details a number of other developments:
Investment demand in Europe reached a record quarterly value of €4.6bn, equating to 118.1 tonnes - a year-on-year increase of 135%. The increase in overall investment demand was all the more impressive given the sharp gold price correction in September, which encouraged a wave of profit taking among bar and coin investors. Virtually all markets saw strong double-digit growth in demand for gold bars and coins.
Chinese jewellery demand was 13% higher year-on-year at 131.0 tonnes, equivalent to RMB46.0bn. The bulk of this increase was seen in smaller cities as retail chains expanded their networks to meet increasing demand fuelled by rising income levels. China’s growing appetite for gold as a means of investment saw demand for gold bars and coins expand by 24% from year earlier levels to 60.2 tonnes.
Jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold price. Buying has since recovered slightly with the onset of the festive and wedding season. Overall, Indian jewellery demand in Q3 saw a 26% decline in tonnage, when compared to the same quarter in 2010, to 125.3 tonnes, however yearly demand to the end of September is very close to the record levels seen in 2010.
Marcus Grubb, Managing Director, Investment at the World Gold Council commented:
“Unsurprisingly investment demand for gold was a key driver during the third quarter. Increasing levels of inflation, the US credit rating downgrade, a worsening eurozone sovereign debt crisis and the lacklustre performance of many assets drove investors to increase holdings in gold in order to protect their wealth. Given gold’s proven risk mitigation properties, it is likely that investors will continue to seek protection from economic uncertainty, which shows no signs of abating.
“The long-term fundamentals for gold remain strong with a diverse and growing demand base coupled with constrained supply-side activity.”
Gold Demand Statistics for Q3 2011: Global gold demand in the third quarter of 2011 increased 6% year-on-year to reach 1,053.9 tonnes, up from 991.1 tonnes in the third quarter of 2010. Gold demand in value terms was worth a record US$57.7bn up from the previous high of US$45.7bn in the preceding quarter. The quarterly average price rose 39% from year earlier levels to US$1,702.12, while the gold price reached a new record of US$1,895.00 (London PM Fix) on 5th and 6th September.
Global gold investment demand reached 468.1 tonnes in the third quarter of 2011, up 33% from 352.1 tonnes in the corresponding quarter in 2010. The rise in prices led to a record US$25.6bn in value terms, almost double the US$13.9bn witnessed in Q3 2010.
Demand for gold bars and coins increased 29% to reach 390.5 tonnes, up from 303.0 tonnes in Q3 2010. In value terms demand for bars and coins in Q3 2011 equated to US$21.4bn compared to US$12.0bn in Q3 2010. Gold ETFs and similar products witnessed inflows of 77.6 tonnes in the third quarter of 2011, which was 58% above year-earlier levels of 49.1 tonnes. Global demand for gold jewellery of 465.6 tonnes in the third quarter of 2011 was 10% below year-earlier levels of 518.9 tonnes. In value terms demand reached a quarterly record of US$25.5bn, 24% higher than the third quarter of 2010, which registered US$20.5bn.
In spite of challenging market conditions, gold demand from the global technology sector showed significant resilience and was flat year-on-year at 120.2 tonnes. In value terms demand from the electronics sector was equivalent to a record US$4.8bn.
Central bank net purchases amounted to 148.4 tonnes, as they continued to increase their allocation to gold as a percentage of total reserves. Gold supply was 1,034.4 tonnes in the third quarter of 2011, 2% higher than year-earlier levels of 1,013.0 tonnes. Mine production increased by 5% to 746.2 tonnes from 710.9 tonnes during the third quarter of 2010.
Despite record prices being reached during the quarter, recycling activity was relatively modest. Third quarter 2011 gold recycling accounted for 426.5 tonnes of supply, up 13% year-on-year from 379.1 tonnes.
Dalam ruang lingkup ini pihak kami tidak menyarankan anda terlalu taksub dengan harga sasaran yang dibuat. Ini disebabkan pakar-pakar pelaburan termasuk Pendita Emas menggunakan instumen berbeza dalam membuat ramalan harga emas semasa dan masa depan.
Kepelbagaian ramalan harga emas dunia tahun 2012
Ramalan harga emas dunia pada USD2500/0z Ramalan harga emas pada USD3000/0z Ramalan harga emas pada USD5000/oz Ramalan harga emas pada USD10,000/oz Ramalan harga Pendita Emas USD3200/0z
Ramalan harga emas domestik(Malaysia)
Ramalan harga emas RM240/g Ramalan harga emas RM280/g Ramalan harga emas R300/g Ramalan harga emas RM350/g Ramalan harga emas RM500/g Ramalan harga emas Pendita RM320/g -------------------------------------------------
Mark Mobios adalah pengerusi eksekutif Templeton Asset Management, Ltd. Pada masa ini, beliau menerajui pasukan penyelidikan Templeton yang berpangkalan di 15 pejabat negara-negara sedang membangun. Beliau telah menulis beberapa buah buku termasuk “Trading with China,” “The Investor’s Guide to Emerging Markets,” “Mobius on Emerging Markets,” “Passport to Profits,” “Equities—An Introduction to the Core Concepts,” “Mutual Funds—An Introduction to the Core Concepts” dan “Mark Mobius: An Illustrated Biography.”
Mobius berpendapat pasaran sedang menaik (bull market) boleh kekal beberapa tahun lagi, kerana kemelesetan baru sahaja berlaku dua tahun lepas. Dalam pasaran sebegini, mungkin peningkatan luar biasa berlaku.. Menurutnya, wang kini disalurkan bukan menerusi bank, seperti yang berlaku pada tahun 1993, tetapi kepada pasaran ekuiti.
NEW YORK—Gold futures edged higher, settling at the highest price in three weeks as investors continued to warm to the precious metal after December's losses.
The most actively traded gold contract, for February delivery, rose $7.40, or 0.5%, to settle at $1,620.10 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement since Dec. 13 and the fourth consecutive session of gains.
"People who were jittery about owning gold probably (cashed out) at the end of 2011," said Adam Klopfenstein, a market strategist with Archer Financial Services. "At these (price) levels, it's regaining a little more investor interest."
Gold prices slumped 10% in December, as some money managers preferred to end the year holding cash instead of precious metals. Worries about a potential financial crisis in Europe led investors turn to the flexibility of the U.S. dollar for safety.
The metal was also supported Thursday as investors sought gold to shield their wealth from political upheaval as debate continued in Europe over a potential oil embargo against Iran.
Iran has threatened to block a key oil-trade choke point at the mouth of the Persian Gulf if Europe goes ahead with sanctions targeting the country's suspected nuclear weapons program.
Many analysts are sticking to their bullish outlook for gold in 2012 on expectations that strain in the global financial system and high levels of developed-world debt will boost the metal's appeal as an alternative asset.
"Gold should ultimately benefit from any negative global economic conditions," HSBC analyst James Steel said in a note.
HSBC and Barclays Capital both reduced 2012 gold-price forecasts Thursday, but held to expectations for rising prices this year.
HSBC cut its outlook by 9%, to $1,850 a troy ounce. Barclays cut its estimate by 6% from a November forecast, to $1,875 an ounce.
The investment banks cited moves by financial institutions to pare their debt, an uncertain outlook for physical gold demand and recent investor preference for the U.S. dollar above other assets, among other potential headwinds to the market.
Investor clamor for the dollar has taken some of the shine off of gold in recent months, as strength in that currency made dollar-denominated gold more expensive for buyers using other currencies.
"As long as confidence in the [euro zone] is being undermined, we could see a strengthening dollar cut into any upside for precious metals," said Marc Ground, an analyst with Standard Bank, in a note.
The euro was at about $1.278 at the close of Comex gold floor trading, versus $1.2944 late Wednesday in New York.