Societe Generale issued a note that has investors wondering whether 2013 will be the first year since 2000 that gold ends the year down.
In it, they present the bullish and bearish argument in the simplest manner possible:
There are three negative factors for gold: 1) Equities stand at their lowest level since 20 years, relative to gold, making the latter less attractive; 2) the US dollar could appreciate and interest rates may rise amid signs of a stronger economic recovery; 3) inflation is still under control.
There are also three positive factors for gold: 1) currency wars and renewed monetary easing could push gold higher; 2) demand from emerging countries may increase; 3) in the long run, gold may play a role in the transition to an international currency reserve system.
The most crucial question, really, is the interest rate one.
If real interest rates in the US begin to normalize, gold will likely get crushed, as Goldman Sachs (and others) have pointed out lately.
More and more people are jumping on board the "Old Normal" bandwagon, the idea that the economy is exiting its stage of crisis, and that we'll have more predictable Federal Reserve-induced business cycles. If that gains traction, bad news for gold.
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