Gold price faces worst week since 2021 as Fed signals no rate-cut rush
Bullion has fallen six days in a row and is set for a weekly loss of more than 4%.
While gold climbed 6.2% in 2012, the bull-run for the precious metal ended in 2011 and the market will continue to feel the aftermath effects this year, especially when it comes to the precious metal prices, says the latest report by U.S.-based mining consultants CPM Group.
In its the Gold Yearbook 2013 published this week, the experts say the average price of gold is expected to fall this year for the first time since 2002, as fading fears of catastrophic market events prompt investors to scale back bullion purchases.
According to Jeffrey Christian, managing director of precious metals consultancy at the New York-based group, gold may average $1,565 an ounce over the course of 2013, compared to $1,668.75 last year.
“The global economy is likely to muddle along,” says the study, adding that “present [positive] sentiment has reduced the urgency [felt by investors to buy gold].”
CPM also expects a dip in gold investment demand, a major driver behind gold’s bull cycle, with a predicted 3% decrease this year to 37.6 million ounces, down from 38.7 million ounces last year and about 40.7 million ounces in 2011.
“Investors remain interested in owning gold, but have become increasingly price sensitive,” the analysts write.
Gold is down 4% year to date. If analysts’ projections prove accurate, it will mark the end of bullion’s 12-year bull run that culminated in a record high above $1,920 an ounce in September 2011.
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