BofA Merrill Lynch: Gold Prices to Rise Steadily Through 2014


BofA Merrill Lynch: Gold Prices to Rise Steadily Through 2014

September 25, 2012 59 view(s)

News regarding gold prices has been flowing from the media on a frequent basis, and the vast majority of it has been very good. The latest word from Bank of America Merrill Lynch analysts say more of the same. They claim the gold market is looking great and that gold should hit $2,400 per ounce by the end of 2014.

A recent article by Tatyana Shumsky in the Wall Street Journal explained that those who buy gold today are likely to see it rise in value due to a number of factors, not the least of which is the often discussed third round of quantitative easing (QE3) started by the Federal Reserve.

This move alone has drawn responses from experts across the world of investing and many have stated in the press that they believe it will stimulate people to consider hard assets like gold and silver over cash.

While the bond purchasing program from the Fed is sure to lead many towards the gold market, there is also the fact that the market has more investors coming in from around the world. Gold prices thrive when the market expands because greater demands positively interact with the natural scarcity of the asset.

Choosing to buy gold at today's prices runs very little risks, according to the team of analysts at Bank of America Merrill Lynch because prices are unlikely to go lower than $1,500 at any point in the next two years. Of course, they still predict that the end result will be a price per ounce that is $1,000 higher than the lowest figure which is certainly impressive.

Inflation is a fear that many investors in the United States worry over and this is unlikely to change after QE3. Instead, there is a marked tendency for investors to begin to take a renewed interest in gold, silver and other hard assets; but it is not just demand from U.S. investors that is worth noting.

"With emerging markets getting richer," the report said, "Their budget allocation to non-essential items such as gold will likely increase in the long-run."

This key factor could mean prices continue to rise steadily after 2014 as well, and that would be very good news for those who are into gold and silver for the long run. Most investment experts advise a portion of precious metals in a portfolio because it can help to guard against economic instability, but the process of diversification is different for each investor.

If the Bank of America Merrill Lynch analysts predictions are true, then profits can and will be made in the span of just two years, but the opportunities for long term stability will continue to require a long term commitment.

Experts from a firm like Bank of America Merrill Lynch definitely have experience and education on their side, but it does not take someone of this standing to see that gold is looking very good these days.

How one chooses to take advantage of the opportunity is a personal choice, but letting this opportunity pass would be easy to regret in the future - that is why so many people are deciding this is the year they invest in gold.