Gold price set to reach $US1600

Increased investor demand is expected to see the gold price surpass US$1600 an ounce this year, according to GFMS, the London-based precious metals research consultancy.
Posted in News

 
Increased investor demand is expected to see the gold price surpass US$1600 an ounce this year, according to GFMS, the world’s leading precious metals research consultancy.
 
Speaking at the launch of the consultancy’s Gold Survey 2011 report, GFMS chairman Philip Klapwijk said “the prospects for gold prices this year remains bright”.
 
“Investors continue to be concerned about the outlook for inflation, with governments in general showing little appetite to tighten monetary policy significantly,” he said.
 
“And, with the spotlight shining on the state of government finances, there is every reason to believe that investors will remain focused on the gold market.
 
“Furthermore, growing price acceptance by consumers will help lift jewellery demand, while generating only a muted response from scrap.
 
“Together these will help raise the support level in the gold market and provide a firm platform for investors to take gold higher.

“Overall we would not therefore be surprised, therefore, to see gold break through US$1600 before the end of the year.”

Nonetheless Klapwijk stressed that in the short term prices could “retrace” from current levels with the “high $1300s” a possible low over the next three months.

In addition, “market imbalances suggest that at some point the gold price will have to retreat,” but “this is most unlikely to occur on a secular basis in 2011and potentially not until well into 2012, especially if current economic conditions, which still favour gold investment, are largely maintained”.

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