Gold News

Gold Prices 'could reach $1,300' in 2010

A senior figure at JP Morgan Chase & Co claimed yesterday (May 12th) that Gold Prices could be as high as $1,300 per ounce in 12 months' time, Bloomberg reports.

The yellow metal has enjoyed a strong performance since the beginning of the credit crunch as people have bought it in their droves in an attempt to find a store of wealth.

However, Jan Loeys, global head of marketing strategy at the firm, has explained that the tide is turning and Gold Investment looks set to rise for another of its qualities - providing a hedge against inflation.

He told the news provider: "Over the next year or so, we think we are going to be crossing $1,000, probably going ultimately to $1,200, $1,300 just for inflation hedging and lack of supply.

"The buying we are seeing now in commodities is really hedging, hedging off the potential risk that we will see a spike in inflation."

Mr. Loeys' views were strongly backed up recently by Warren Buffett, the renowned investor and second-richest man in the world, according to the latest Forbes magazine data.

Speaking at the annual shareholders' meeting of his Berkshire Hathaway investment vehicle in Nebraska, he explained that the huge fiscal output in response to the recession will see the dollar slide in the coming months.

"What we are doing is borrowing from the rest of the world and building up government debt," he said.

"The classic way of reducing the impact and cost of foreign debt is by reducing the value of the dollars you're going to repay them with."

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