MarketWatch: Gold demand at 'interesting crossroad,' prices could hit $1,450 this year

Source: MarketWatch 

Gold demand stands at an “interesting crossroad” so far this year, with “numerous conditions triggering market demand,” Lear Capital’s Chief Executive Officer Scott Carter told MarketWatch on Monday.

Lear Capital expects an average of around $1,400 an ounce for the year. It even sees gold reaching $1,450 this year. Many analysts, however, forecast average 2014 gold prices below $1,300 an ounce. Barclays last week raised its average 2014 gold price forecast to $1,250 from $1,205.

As of Monday intraday, futures prices for gold are poised for a loss of roughly 2.5% for the month of March, but for the quarter and year to date, they’re up more than 7%.

“In terms of the global economy, gold spot prices advance on three, basic conditions: uncertainty volatility and demand,” said Carter in an email interview.

Never before has the Federal Reserve interfered in the U.S. financial system as it has “under the portents of quantitative easing,” he said, pointing out that “for over 5 years the markets have been the beneficiary of the ultimate coddle … billions and billions a month in Federal bond buying.”

“While we know that it must eventually end, no one is certain exactly how it will happen or what will be left when it does,” Carter said.

“We are also living in a volatile and explosive, worldwide landscape and anyone that discounts the importance of gold as portfolio contingency planning, is simply not paying attention,” he said.  “Wall Street has been unstable, emerging markets have been unpredictable, U.S. foreign policy has been unclear, U.S. lawmakers have been at odds, and there seems to be far more global conflict then there is global accord.”

Through it all, “gold is not only an enduring and highly resilient vessel” navigating uncertain waters, but “it is also a great economic equalizer and ultimate safe-haven,” said Carter.