Gold futures will achieve a 12th consecutive year of annual gains, the yellowish and silver metals will surge higher if the U.S. Federal Reserve implements a fourth round of quantitative easing next week, and bullion could potentially be worth close to $2,200 by the end of next year, according to senior broker Kurt Pfafflin with Daniels Trading.
On Friday, the precious metal was gaining in value after scraping its lowest price in one month on Thursday, Reuters reports.
Thus far this year, bullion's gains have been about 10 percent while the advance for the whitish metal has been 20 percent, Pfafflin said.
"That's probably a fair assumption barring any massive collapse in the last month of the year," the senior broker said regarding a 12th straight year of annual gains for gold. "I think it's pretty safe unless something crazy happens and anything can happen in the markets but I think it's on track to do that."
At 1:47 p.m. on Friday, gold futures were up 0.21 percent, a $3.96 lift to $1,703.49 per troy ounce. Silver futures edged up 0.02 percent, a 30-cent lift to $33.03 per troy ounce.
The record prices for gold futures is $1,923.70 per troy ounce as established on September 7, 2011. Silver's record price is $50.35 per troy ounce as set in 1980 when the Hunt brothers of Texas attempted to corner the market for the precious metal.
Central bank intervention
Bloomberg reports worldwide central banks are moving forward with intervention, which is beneficial for the prices of the precious metals. The effort aims to improve economic situations as the recovery from the Great Recession continues.
Officials with the central bank of the U.S. are poised to convene on Wednesday of next week, Pfafflin said.
Should the body opt to implement a fourth round of quantitative easing, that would give the precious metals a pop, Pfafflin said.
Another analyst said the yellowish metal is embroiled in an intriguing situation at the present time.
"Gold remains in the middle of a superstorm, but it's not the perfect storm," analyst Filip Petersson with SEB AB in Stockholm told Bloomberg. "It's not the time to short gold but on the other hand it is not very appealing either. If the global recovery picks up pace without inflation the game is over for gold."
Friday gains tempered
MarketWatch reports the world's reserve currency gained in value on Friday, which typically draws down the price of gold since the two perform the inverse of one-another.
The U.S. dollar benefited from a stronger jobs report in the nation as the unemployment rate fell to 7.7 percent from 7.9 percent in November. That represents the lowest it has been since December 2008.
But trouble could very well be ahead for the U.S. economic system due to the ongoing fiscal cliff negotiations between political leaders on Capitol Hill.
"The biggest result of the negotiation [is] the fact that the unknown, the uncertainty, the inability to really come to any real resolution has in general made it difficult for money to come into markets," the senior broker with Daniels Trading said. "And when there's uncertainty, people sit on their hands. 'When in doubt you get out' and we've seen that increasing over the last, probably over the last quarter but much more pronounced over the last month or so where people are really taking a look at what's going on in their portfolios, how this is going to affect them and their money."
The precious metals will push well past their record highs next year if the Fed implements various practices, Pfafflin said.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.