NEW YORK, NY--(Marketwire -08/10/12)- Gold stocks have struggled in 2012 as a slowing global economy has resulted in lackluster physical and investor demand for the precious metal. The Market Vectors Gold Miners ETF (GDX) has fallen close to 17 percent this year, while the Market Vectors Junior Gold Miners ETF (GDXJ) has fallen over 21 percent. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on NovaGold Resources Inc. (NG) (NG.TO) and New Gold Inc. (NGD) (NGD.TO).
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HSBC analysts have stated in a recent report that gold could potentially gain from the political and economic turbulence in the U.S. and by the end of the year hit $1,900 per ounce.
"Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically gold-bullish," and gold should rally in the second half of the year "when U.S. growth is poor and the dollar is weak," a new HSBC report said. "We expect prices to rally to above $1,900/oz by the end of the year. Patience is the most important commodity."
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Gold prices increased for the third time in four days Wednesday on increased speculation that central banks would take stimulus measures to help bolster their economies. Gold prices have gained 1.6 percent since August 2nd. From the end of 2008 to June 2011 gold soared roughly 70 percent as the Federal Reserve purchased $2.3 trillion in debt and kept borrowing costs at record lows.
"The investor side is likely to remain interested for as long as sentiment is upbeat and peripheral bond yields in the [euro zone] stay off their summer peaks. It might seem illogical, but so far gold has failed to attract any safe-haven inflows, instead trading as any other risk asset and in line with the broader market sentiment," analysts at VTB Capital wrote in a note to clients.
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