Gold forecast to hit $1,800 an ounce

Gold forecast to hit $1,800 an ounce, as prospects for additional stimulus stoke demand for the metal as a bet against inflation. Gold is set for a 12th year of gains and reaching $1,800 an ounce would extend gains this year alone to 15 percent, the most since a 30% surge in 2010.

Chronicle News Services
Updated 8:56 p.m., Monday, August 27, 2012
San Fransisco Chronicle

COMMODITIES
Gold forecast to hit $1,800 an ounce

Gold is poised to climb the most in two years as prospects for additional government stimulus to revive economic growth stoke demand for the precious metal as a bet against inflation.

Bullion for immediate delivery may reach $1,800 an ounce by the year-end, extending gains this year to 15 percent, according to the median forecast in a Bloomberg survey of 15 traders and analysts. That would be the most since a 30 percent surge in 2010, data compiled by Bloomberg show.

Gold is set for a 12th year of gains as the European sovereign-debt crisis boosts haven demand amid speculation of further policy easing by central banks, including the U.S. Federal Reserve, which may be considering a third round of what is called quantitative easing, or QE3. Investment holdings have expanded to a record on demand for a hedge against inflation.

WINE
New brand from Yellow Tail makers

Casella Wines, the maker of Yellow Tail wine, is developing a product that will sell for about 50 percent more than its main brand to escape a squeeze on Australia's wine exports from the strong local currency.

A good vintage during 2012 will allow the winemaker to introduce the new brand by the end of next year, with two red and one white varieties priced at about $10 a bottle, said managing director John Casella.

Australian wine exports fell 10 percent from a year earlier to decade lows during 2011 as the strength of the local currency and bargain-hunting by U.S. drinkers pared profit margins.

The success of cheaper Yellow Tail, the third-best-selling wine in U.S. supermarkets according to data compiled by Nielsen Co. and Goldman Sachs Group Inc., has also been blamed for pushing the image of Australian wine down-market.

ACQUISITIONS
IAC outbids Answers Corp. for purchase of About.com

Barry Diller's IAC/InterActiveCorp agreed to buy About.com from New York Times Co. for $300 million in cash, letting the company expand its Ask.com informational-website business.

The transaction is expected to be completed in the next several weeks, Times Co. said Sunday. IAC outbid an earlier $270 million offer from Answers Corp., according to a person with knowledge of the matter, who asked not to be named because the talks were private. Times Co. will use the proceeds from the deal for general corporate purposes.

"This sale will allow the Times Co. to focus on the development and growth of our core brands locally, nationally and on a global scale," Chairman Arthur Sulzberger Jr. said.

About.com, which relies on freelancers to produce stories and how-to videos, has struggled to attract traffic and advertising dollars. By contrast, IAC saw revenue from Ask.com and its other search-related sites climb 46 percent to $348.8 million last quarter.

IAC will add answers from About.com into searches on Ask.com, just as it does with free content from Wikipedia, Chief Financial Officer Jeff Kip said. That, along with advertising alongside Google searches, will help revive About.com, he said.

Shares of Hertz, Dollar up after completion of deal

Shares of Hertz Global Holdings Inc. and Dollar Thrifty Automotive Group Inc. jumped after Hertz struck a deal to buy the smaller company for about $2.6 billion following more than half a decade of trying.

Dollar Thrifty stock rose 7.5 percent to close at $87.08. Hertz increased 8 percent to $14.20.

The $87.50-per-share offer represents an 8 percent premium to Dollar Thrifty's closing price of $81 on Friday. It's more than double what Hertz offered a little more than two years ago to secure the company's No. 2 position in the U.S. market.

The acquisition may be the last combination of major U.S. car-rental companies that regulators will tolerate, an analyst said. Hertz, Enterprise Holdings Inc. and Avis Budget Group Inc. together control about 75 percent of the market, with Dollar Thrifty at 5 percent, according to a February report from IBISWorld. No other competitor has more than 1 percent market share, IBISWorld said.

Based on 29.8 million shares outstanding, Dollar Thrifty is being acquired for an equity value of about $2.6 billion.

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