The spot gold price was holding onto its strong gains last week to hover around the $1,465 an ounce level in European trading on Monday.
Gold suffered a $200-plus decline that began on Friday 13 April and accellerated into Monday when the metal dropped to multi-year lows of $1,326 an ounce.
Gold’s recent push higher breached important technical levels and the 50% recovery of recent losses is also a bullish signal for the gold market.
Some of the big investment banks made prescient calls ahead of the crash.
Most notable was Wall Street heavyweight Goldman Sachs who urged clients to start shorting the metal a few days before and French investment and London bullion bank Société Générale which at the start of April called “The End of the Gold Era”.
MarketWatch reports its survey of 10 forecasts shows all predictions for average prices this year are above today’s price. Next year is a different story however with just over half the banks turning bearish for 2014:
HSBC is the most optimistic for this year, with a target of $1,700. Bank of America/Merrill Lynch is not far behind, forecasting gold will average $1,670 this year.
The MarketWatch survey shows that Mitul Kotecha, Credit Agricole’s head of foreign exchange strategy, has the lowest price predictions, forecasting average prices of $1,480 for 2013 and $1,318 for 2014.