SPDR Gold Trust (ETF) (GLD): Gold Set to Smash Through $1,800 per Ounce by Year’s End

LONDON — Gold prices have remained in the doldrums in recent months, putting in their worst quarterly performance in more than 10 years during January-March and conceding 5.3% since the start of the year. The metal plumbed as low as $1,540 per ounce late last week — its cheapest since May 2011 — before recovering ground to $1,570 recently.

SPDR Gold Trust (ETF) (NYSEARCA:GLD)

However, I am convinced that current prices provide a sound base from which investors can build excellent returns. I believe that a backdrop of escalating macroeconomic and political uncertainty, particularly in Europe and the U.S., combined with rising inflation should push the store-of-value asset higher in coming months. And investors can tap into this theme by purchasing SPDR Gold Trust (ETF) (NYSEMKT:GLD) and GOLD BULLION SECURITIES LD (LSE:GBS), instruments that are designed to track movements in the gold price.

Analysts predict golden charge later in 2013
Metals consultancy Thomson Reuters GFMS announced last week that it expects gold prices to soar above $1,800 per ounce by the end of 2013, providing chunky upside from current levels. Specifically, the forecasters reckon that the likelihood of fresh political turmoil in the U.S. could herald fresh safe-haven investment in the yellow metal as the year progresses.

The twin issue of heavy budgetary cutbacks, and discussions over the lifting of the country’s debt ceiling, could prompt fresh battles between Democratic and Republican lawmakers in the coming months, and GFMS does not expect these issues to be resolved in the near future.

Ongoing QE to boost store-of-value metal
The consultancy noted a multitude of other supportive factors for the gold price, such as the continued implementation of loose monetary policy by the Federal Reserve. GFMS says that it does not expect the current unlimited quantitative easing program to start to wind down until well into 2014 at the earliest — these measures erode the value of the dollar, increasing inflation and boosting demand for hard currencies like gold.

Elsewhere, the possibility of political and economic turbulence in the eurozone could send gold interest higher, the organization added. Inflows into gold exchange-traded funds (ETFs) received a shot in the arm last month, while discussions regarding the Cypriot bailout were at their height, during which time gold struck its highest since early February around $1,615 per ounce.

Central bank demand for gold remains bubbly — official sector purchases hit their highest since the 1960s last year, at 534.6 tonnes, according to the World Gold Council — due to doubts over the state of the global economic recovery and escalating fears over the value of fiat currencies. I expect these themes to boost gold prices much higher as the year progresses.

Mine gold stocks for gains
Investors can also gain exposure to a rising gold price through shrewd stock picks in the mining sector. Galloping demand for natural resources should continue to drive broader commodity stocks higher over the long-term.

The article Gold Set to Smash Through $1,800 per Ounce by Year’s End originally appeared on Fool.com and is written by Royston Wild.

Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!