Gold Prices Expectation 2013

Expects gold prices to average 1,802/oz, 1,800/oz and 1,850/oz, respectively, in the first three quarters 2013, before slipping to 1,750/oz in the fourth quarter.
Gold prices are likely to continue strengthening through the rest of this year and into 2013 with prices stabilizing around 1,800 a troy ounce in the next few months, Societe Generale analyst Robin Bhar said in a report late Tuesday.

Gold forecast is based partly on expectations of emerging inflationary forces and the likelihood of the U.S. dollar remaining under pressure because of loose monetary conditions in the U.S., he said.

"That said, we believe that much of these forces are partially priced into the market and that, while investors remain friendly towards gold, they are to some extent positioned accordingly," Mr. Bhar said.

Analysts have said that the wrangling between U.S. lawmakers on how to avoid the fiscal cliff--a combination of automatic tax increases and spending cuts set to kick in from January unless Congress acts--could be supportive for gold as investors move part of their funds to safer bets.

Both the global economic and political situations are expected to support gold, he noted.

With U.S. corporate earnings under pressure, investors are concerned about the outlook for equities, which could also support demand for gold, he said.

"With or without the fiscal cliff, therefore, the conditions in the U.S. economy point towards sustained gold support for much of 2013," Mr. Bhar said, adding that persistent problems over the euro zone's financial situation will drive demand for gold.

At 0132 GMT, spot gold was at 1,726/oz in Asia, down 2.10 from its closing price Tuesday.