Major international bank Standard Chartered explained yesterday (August 25th) that it expects to see further rises in gold prices in the coming months.
The bank, which derives 90 per cent of its profits from the emerging trade corridors of Africa, the Middle East and Asia, has cited several factors underpinning its prediction.
The first is said to be the lack of recent significant gold sales from the central bank, with the annualized figure currently standing at 380 tonnes - well below the maximum permitted under the Central Bank Gold Agreement of 500 tonnes.
Furthermore, the bank alludes to the 12 per cent drop in output in South Africa during June, explaining that the volume of scrap sales currently offsetting this will decline as prices have cooled.
Worries over the health of the US banking sector and its effect on the dollar are also being pinpointed as a good sign for people investing in gold, while concerns over the economy at large look set to persist.
Meanwhile, Standard Chartered has claimed that it expects gold prices to average $911 for 2008 and increase to an average of $994 for 2009, with strong growth in the second half of the year in particular.