Gold Still a Safe Haven
By Swagato Chakravorty
Tuesday, January 22nd, 2013
According to Goldman Sachs Group Inc. (NYSE: GS), the upcoming debt ceiling debate is likely to push gold higher in the face of domestic and international economic uncertainties.
“We see current prices as a good entry point to re- establish fresh longs,” analysts Damien Courvalin and Alec Phillips wrote in a Jan. 18 report. The bank reiterated a three-month target of $1,825 an ounce, as well as a forecast for prices to weaken in the second half as the U.S. economy rebounds.
Last quarter, gold posted its most dismal performance since 2008, dropping 5.5 percent as apprehensions rose over the prospect of an end to Federal Reserve stimulus actions and a recovering economy.
But gold pulled up strongly throughout 2012, trading at $1,687.90/oz on Monday morning. ETP holdings also reached a new high in December.
According to the Treasury, the domestic debt ceiling is set to be increased from its present limit of $16.4 trillion by March – the deadline for an increase.
And with stimulus action continuing across the globe, gold remains an attractive investment.