Citigroup: Gold prices may top $2,000 per oz next year

Leading banking firm Citigroup has claimed that gold prices could easily top $2,000 per ounce next year, regardless of the macroeconomic factors at work in the longer term.

The second-largest financial institution in the US released a note last week which suggested that gold is still firmly in a bull market, breaking out to the upside against other commodities.

Although the company stopped short of saying the move is imminent, chief technical strategist Tom Fitzpatrick pointed out in the statement that investing in gold is still a wise strategy.

He said: "For those who refer to gold as 'that useless piece of yellow metal that has no real value and earns nothing' (and have done for years), they might want to look at financial market charts more closely.

"We continue to believe that a move of similar percentage to that seen in the 1976-1980 bull market can be seen, which would suggest a price north of $2,000."

The view that gold prices could push through the $2,000 per ounce barrier was also championed recently by John Hathaway, senior managing director at Tocqueville Asset Management.

He explained that a number of factors - such as higher inflation, a weaker US dollar and perhaps even the downgrading of Treasury debt - could all work in gold's favor.

"Gold trading steadily at $2,500 is not unthinkable," he said.

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