Danske Bank A/S and Credit Suisse Group AG, the most-accurate gold forecasters, say prices will probably peak this year while their nearest rival, UniCredit SpA, sees no end in sight to the 12-year bull market.
Gold will average $1,720 an ounce this year and $1,600 in 2014, said Christin Tuxen of Danske Bank in Copenhagen, who came closest to predicting moves in the past eight quarters, according to data compiled by Bloomberg. Tom Kendall at Credit Suisse in London expects $1,740 and $1,720 and Jochen Hitzfeld of UniCredit in Munich predicts $1,700 and $1,800. Bullion rose more than sixfold since the bull market began in 2001.
All three forecast record average prices this year because central-bank stimulus will sustain buying as a hedge against inflation and currency devaluation. Danske and Credit Suisse predict lower prices in 2014 as economic growth curbs demand for the metal as a protector of wealth while UniCredit says record- low interest rates will maintain gold’s allure.
“Gold will definitely continue to rise but the euphoria has subsided,” said Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion of assets, including gold. “The track record is great but this year it will take a breather.”
Investors bought $141.7 billion through exchange-traded products since gold’s longest bull market in at least nine decades, creating a hoard bigger than the official reserves of all but two nations. Prices have retreated for three successive months as Europe’s debt crisis eased and faster growth from the U.S. to China spurred speculation that central banks will pare back stimulus.
The metal advanced 0.4% to $1,681.86 in London this month after rising 7.1% in 2012, the smallest advance in four years. The Standard & Poor’s GSCI gauge of 24 commodities gained 1.3% since the start of January and the MSCI All- Country World Index of equities added 2.9%. A Bank of America Corp. index shows Treasuries lost 0.4%.
The top six gold and precious-metals analysts tracked by Bloomberg Rankings remain bullish for this year, with a median forecast for prices to reach a record $1,997.50 by December. Bloomberg currently tracks the predictions of 26 analysts.
Prices retreated to a four-month low Jan. 4 after Federal Reserve minutes showed some policy makers favored ending $85 billion in monthly bond purchases this year as the recovery gains traction. The U.S. will accelerate from the second quarter through the end of 2013, economists’ forecasts compiled by Bloomberg show. Gold surged 70% as the Fed bought $2.3 trillion of debt from December 2008 through June 2011.