An experienced analyst has hinted today (November 17th) that Gold Prices reaching $5,000 per ounce is not entirely out of the question, the Daily Telegraph reports.
The yellow metal has pushed to a new record high near $1,150 this week but then dropped back, prompting some commentators to predict a sizable sell-off.
However, Martin Hutchinson, from financial commentary portal breakingviews.com, has explained that a look at the history of Gold Prices suggests that further major gains could be in store.
"When money is easy and demand moves much faster than supply, prices can explode," Mr. Hutchinson, who has 25 years' experience in international merchant banking, told the newspaper.
"In 18 months from July 1978, gold went from $185 per ounce to $850. That's $2,400 in today's dollars. And interest rates then were much higher than now. A similar price rise from here would bring gold to more than $5,000 per ounce."
The world's leading independent broker of exchange-listed futures and options has also provided a glowing endorsement of the value of investing in gold.
MF Global explained that the ongoing weakness in the dollar - which shares a negative correlation with gold - is the main reason for looking to take a long-term position.
"The long-term positive argument [for gold] is still in place and mainly centres on weakness in the dollar, a lack of faith in US intention to support it and hedge-fund buying," said a group of analysts from the firm in a note.
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