Merrill Lynch Predicts $2,000 Gold

With expectations the Federal Reserve will be forced to provide another round of quantitative easing, Merrill Lynch said they see the price of gold jumping to $2,000 an ounce.

According to Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at Merrill, he sees the Fed adding up to $500 billion more to its asset-purchasing program sometime in the second half of 2012.

Blanch said this on Squawk Box:

"We think that $2,000 an ounce is sort of the right number. We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election, we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year."

Many high profile investors concur with the bullish view on gold, as they assert the Federal Reserve and other central banks won't be able or willing to refrain from attempts at "stimulating" their economies, even though it had done nothing to help in the past.

That points to eventual inflation, which favors gold, silver, and other commodities which trade in U.S. dollars, which will also eventually plunge from its temporary lofty position.

Some people even think that when Ben Bernanke talks to Congress next week about the economy that he could at that time announce another stimulus package.

Since the U.S. dollar has risen to fast and high recently, Bernanke could in fact make a move next week, as he favors a weak dollar as his tactic for attempting to alleviate a recession.

Another factor on the U.S. side is the presidential election, where the horrible American economy threatens the reelection of Obama. There will be pressure behind the scenes to make it look like something is being done to address the issue in order for Obama to look good.

More stimulus is a certainty. It's only a matter of when, not if. At that time the price of gold will soar again, pulling up many other commodities with it.

John Paulson: Gold Could Hit $4,000

Hedge fund manager and billionaire John Paulson said he sees gold prices moving in a range of $2,400 to $4,000 an ounce, citing double-digit inflation emerging by 2012.

Paulson, speaking at New York's University Club recently, said 80 percent of his assets are held in gold.

He added that the coming inflation will result in gold prices being pushed up even more.

Paulson also said the inevitable quantitative easing by the Federal Reserve could extend double-digit inflation out for serveral years.

It's possible it could be even more than that depending on the economy and the political pressure to interfere with it, which would result in even more stimulus. That would add to the desirability and value of gold.

UBS (NYSE:UBS), CIBC World Markets, TD Securities Increase Gold Estimates

Last week, investment banks UBS (NYSE:UBS), CIBC World Markets and TD Securities all increased their outlook on gold prices, will all of them looking for around $1,300 an ounce or more going forward.

UBS was the last of the three during the week to upwardly revise their numbers, increasing their outlook from $1,129 an ounce to $1,205 an ounce for 2010, and up to $1,295 an ounce, from $1,250 an ounce in 2011.

The dubious stress tests and their results didn't impress UBS, as it didn't many others, as the bank noted that "ongoing pressure on sovereign debt markets, combined with persistent concern over private sector credit contraction will raise the specter of debt monetization repeatedly over the next few years.”

TD Securities increased their gold price estimates in 2011 from $1,100 to $1,300, and from $1,000 to $1,400 in 2012. They also cited global economic uncertainties as the impetus behind their changes in viewpoint concerning gold.

For CIBC World Markets, their changes were the largest, increasing their outlook in 2012 to $1,500 an ounce. Over the long term, they see gold leveling at from $1,000 to $1,200 an ounce.

The fall season is historically a big mover for gold prices, and with prices continuing to find support a slightly below $1,200 an ounce, gold could make a big move starting in September.

Goldcorp (NYSE:GG), Kinross (NYSE:KGC) Should be Outperformed by Barrick (NYSE:ABX), Newmont Mining (NYSE:NEM) says Deutsche Bank (NYSE:DB)

Deutsche Bank (NYSE:DB) analyst Jorge Beristain probably didn't win any friends from Goldcorp (TSE:G) (NYSE:GG) and Kinross Gold (NYSE:KGC) today, as he upgraded major rival Barrick Gold (TSE:ABX) (NYSE:ABX), and reiterated their "Buy" rating on Newmont Mining.

What he added I'm sure ruffled their feathers, as he said Barrick and Newmont should outperform Goldcorp and Kinross in the current economic environment.

Beristain also said the changes in the macro economic picture makes the gold situation even more compelling, as he raised his price targets for gold in 2011 to $1,450, and in 2012 to $1,600 an ounce.

His price target was raised on Barrick from $45 to $53.