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Morgan analyst sees gold at $2,500 by year-end
By Andrea Hotter
Dow Jones Newswires
via The Wall Street Journal
Monday, August 8, 2011
http://online.wsj.com/article/BT-CO-20110808-714003.html
LONDON -- JP Morgan has become the latest bank to up its forecast for spot gold prices, hiking its estimates by a whopping 39% and predicting the precious metal to reach at least $2,500 a troy ounce by the end of the year.
This is almost $800 per ounce higher than current levels, which represent an all-time high.
The U.S. bank had previously expected spot gold to be at $1,800 per ounce by year-end.
The move will come amid very high volatility, the bank's Colin Fenton said, and is being driven by "rising probability of a reflaring of financial crisis."
... Dispatch continues below ...
Lewis E. Lehrman on How to Solve the U.S. Debt Problem
Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.
Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.
Lehrman says: Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy. We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals, and working people 0 percent at the bank, you are not going to encourage them to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."
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Earlier Monday, Goldman Sachs raised its forecast for gold, saying its economists now place a one-in-three chance of a U.S. recession that would most likely occur within the next six months. But its prices are significantly lower than JP Morgan's, with Goldman predicting a spot prices of $1,645 per ounce in three months and $1,730 per ounce by six months.
Gold soared higher overnight and has become an investor favorite amid deteriorating economic conditions in the euro zone and the U.S.
Friday's downgrade of the U.S. credit rating from AAA to AA-plus by ratings agency S&P triggered the most recent strength in gold, which leapt over $70 from Friday's low to peak at $1,715.29/oz earlier Monday.
Morgan Stanley, ANZ, UBS, MF Global, and Barclays Capital last week all upgraded their gold price forecasts, while producers like Barrick Gold, AngloGold Ashanti, and Randgold Resources have been making bullish statements in support of further rises in recent days.
But JP Morgan said it isn't just gold that will benefit from the financial malaise. Commodities geared toward Asia, investment, and inflation will outperform commodities anchored more to the growth prospects and local supply chains of the United States.
"The bullish basket includes Brent crude oil, gas/oil, gold, raw sugar, copper, corn, and wheat," said JP Morgan's Fenton. "The bearish basket includes WTI crude oil, RBOB gasoline, aluminum, zinc, and North American natural gas."
He singled out sugar, noting that dollar weakness and rising inflation expectations open the upside for raw sugar prices to surge far higher than would otherwise be likely, perhaps doubling or more in a spike. But he cautioned that "sugar rallies tend to be brief, violent, and difficult to time."
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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property
Company Press Release, October 27, 2010
VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:
-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.
-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.
-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.
Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.
"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."
For the company's full press release, please visit:
http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
