the<\/span><\/em> long-term safe haven trade.<\/p>\nAccording to the IMF, Mexico and Kazakhstan were active buyers in April, and the Philippines added a million ounces to its reserves in March.<\/p>\n
Gold ran up 14.3% in the first three quarters of 2011 when its safe haven status was firmly established and Societe General\u2019s metal analyst, Robin Bahr, said this week that it will follow the next risk off event, similar to the Lehman collapse. Greece is the most likely driver.<\/p>\n
OCBC analyst Barnabas Gans sees $1,800 per ounce by the end of 2012. He sited a third round of quantitative easing by the U.S. as the catalyst for a return to gold.<\/p>\n
The other factors driving gold\u2019s next run is its correlation to copper prices. The correlation between gold and copper is seen as an indication of weakening economic conditions and it is currently at .5, up from .3 a year ago.<\/p>\n
The Journal<\/em> reported this week that the sell-off we have had for the past few months has been largely driven by fund selling, which could easily shift as the reality of Greece\u2019s departure from the EU and the depths of Spain\u2019s problems emerge.<\/p>\nThe long and short of this one, look for increased buying by funds as the Greek and Spanish situations develop.<\/p>\n