The price of gold could reach US$480 a troy ounce during the first half of 2005 if the euro strengthens to $1.39 in the same six-month period, investment bank Merrill Lynch said in a report issued this week.
The bank sees gold averaging $440/oz in 2005, with the metal trading in a range between $400/oz and $480/oz.
At 11h30, gold was quoted at $422.90/oz, up $1.05/oz from the metal’s previous close of $421.85/oz, and the euro was quoted at $1.2989 from the European unit’s late trade in New York on Thursday of $1.2964.
The major factors for the higher gold price in 2004, low US interest rates and a weakening US dollar, are expected to play an equally important role in 2005.
“Higher price objectives are possible if the up trends in the non-US dollar prices of gold continue, something we would not rule out,” Merrill Lynch said.
Another driver for gold in 2005 is likely to be the improving supply and demand fundamentals for gold.
Few new gold projects are being constructed and Merrill Lynch estimates that world gold output could decline by as much as 10% by 2006 from 2003 levels of gold production.
Merrill Lynch Wealth Management is the wealth management division of Bank of America. The firm is headquartered in New York City, and occupies the entire 34 stories of 250 Vesey Street, part of the Brookfield Place complex, in Manhattan. Merrill Lynch employs over 15,000 financial advisors and manages $2.2 trillion in client assets.
The firm has its origins in Merrill Lynch & Co., Inc. which, prior to 2009, was publicly owned and traded on the New York Stock Exchange under the ticker symbol MER. Merrill Lynch & Co. agreed to be acquired by Bank of America on September 14, 2008, at the height of the 2008 Financial Crisis. The acquisition was completed in January 2009 and Merrill Lynch & Co., Inc. was merged into Bank of America Corporation in October 2013, although certain Bank of America subsidiaries continue to carry the Merrill Lynch name, including the broker-dealer Merrill Lynch, Pierce, Fenner & Smith.
Merrill Edge
Merrill Edge is a discount brokerage service provided by Merrill. The online service was launched on 21 June 2010. The service was expected to compete with similar firms like Charles Schwab Corporation and E*Trade. Before the launching of this service, Merrill worked with clients who had over $250,000 of liquid assets. This service was designed to allow a wider demographic to invest with Bank of America. According to the website, the service offers “the investments insights of Merrill Lynch plus the convenience of Bank of America banking”. Other competitors listed are Ameritrade and Fidelity Investments.
Photo-credit: Nicola-since-1972 via Visualhunt / CC BY
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