Scotia Bank predicts strong Gold Buying over next 18 months

The global corporate and investment banking arm of Scotiabank Group claimed yesterday (July 2nd) that investor interest will keep Gold Prices moving higher in 2009 and 2010.

Writing in their latest monthly Treasure Vault report, Scotia Capital analysts David Christie and Trevor Turnbull predict that "rising inflation should be the primary driver" for the yellow metal.

In addition, they noted that the dollar - which shares an inverse relationship with Gold Prices - will continue to struggle, while also predicting that central banks will buy rather than sell gold in the coming months.

They wrote: "We believe that we will see strong activity in physical gold buying and in gold ETFs in the second half of 2009 and into 2010.

"The falling US dollar, rising commodity prices and the prospects of sky-high inflation should propel investors to own gold and silver as a hedge against these financial uncertainties."

Meanwhile, Ted Peroulakis, a financial analyst with 14 years' experience and a regular contributor to the Investor's Daily Edge newsletter, has predicted that gold prices will smash through the $1,000 per ounce barrier.

"It's just a matter of time before $1,000 becomes the floor price for gold," he wrote on contrarianprofits.com.

"Once gold breaks above the $1,000 per ounce psychological resistance level, the sky is the limit. Gold could easily hit $1,200 or even $1,300 per ounce by year end."

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