Gold prices 'set for sustained rally'

The climate is right for a positive upward trend in gold prices, according to one mining boss.

Speaking to CNBC, Greg Wilkins, chief executive of Barrick Gold, said that gold bullion has much room in which to go even higher than its current record level.

"The fundamentals are in place for a good sustained rally in gold prices," he remarked.

According to GFMS, gold is likely to hit an average of $840 an ounce over the first half of 2008, with further increases "possible" over the rest of the year.

The precious metals consultancy cites the weak dollar, record oil prices, the subprime crisis and geopolitical tensions as the main drivers of this upward trend.

Buyers with gold investments might also be interested to read that GFMS predicts official sector gold sales to fall to just over 200 tons by mid-2008, while gold mining supply is likely to be hit by rising costs and delays.

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