Market Nuggets: BNP Paribas Looks For Gold To Rise In Fourth, First Quarters

Friday September 14, 2012 11:34 AM

BNP Paribas looks for gold to rise in the fourth and first quarters, although the bank has revised its forecasts minimally. The metal has been rallying for several weeks first on expectations for more U.S. quantitative easing, followed by an announcement of more easing measures Thursday, as well as accommodation in Europe and China. Additional market liquidity and higher risk appetite support a positive price forecast, BNP says. “In addition, open-ended QE will exert downside pressure on the U.S. dollar, which tends to be negatively correlated with gold (although the relationship has been unstable since 2009), and may also raise inflationary expectations,” says Anne-Laure Tremblay, precious-metals strategist. The bank looks for Chinese buying to rebound and says official-sector demand should remain strong. BNP forecast $1,795 gold in the fourth quarter and $1,865 in the first quarter of 2013.

By Allen Sykora of Kitco News; asykora@kitco.com

Market Nuggets: BNP Paribas Looks For Further Declines In Gold/Silver Ratio

Friday September 14, 2012 11:34 AM

BNP looks for the gold/silver ratio to keep declining, which would mean silver outperforms gold, but adds that investment demand will be the key for the metal. “The gold/silver ratio has declined from close to 59 at the start of August to near 51 currently, and we expect the downward trend to continue,” BNP says. However, beyond investment demand, other fundamental influences are soft, the bank says. In particular, BNP points to weakening industrial-production growth in the third quarter and growing mine supplies. BNP forecasts $39.15 silver in the fourth quarter and $42.60 in the first quarter of 2013.

By Allen Sykora of Kitco News; asykora@kitco.com