Gold price 'can remain above $1,000 per ounce'

A senior figure at a major asset management firm has today (September 23rd) expressed his belief that gold prices could be sustained above the $1,000 per ounce mark.

Gold prices have been on a rollercoaster ride this year, hitting around $1,030 per ounce in March before declining steeply since July on the back of a strengthening dollar.

However, recent developments in the financial markets have led Daniel Sacks, head of resources management at Investec, to speak out in favour of gold investment.

He told the Daily Telegraph: "I'm bullish, I think we could see the highs of this year again.

"The main story is that the supply is flat to declining. So despite the higher price, you're not seeing any supply response and that's because of the age of the mines in the strong regions like South Africa and Australia.

"Supply will be very tight and now there are new sources of demand such as safe-haven buying. I don't see why this form of demand shouldn't push the price higher."

Meanwhile, Suki Cooper, a precious metals analyst at Barclays Capital, has explained that a number of economic factors are currently playing into gold's hands.

She explained that, despite Barclays predicting that the gold price will hit $890 before the end of the month but shrink to $859 by the end of the year, there is every chance those estimates could be surpassed.

She told the newspaper: "Importantly, the next few weeks are typically a seasonally strong period of demand for gold.

"There is the Diwali festival as well as the wedding season in India, physical buying should help prices find a floor over the next couple of months limiting the downside risks.

"Given the downside is limited, the upside is firmly in the hands of investors. If we don't see further inflows [of gold] then we could see a sustained rally."