Gold News

Gold prices 'to go to $1,500 per oz' next year

A hugely experienced international finance expert and market commentator has claimed today (December 3rd) that gold prices will rebound to $1,500 per ounce in 2009.

Martin Hutchinson, who has accumulated 25 years' experience as an investment banker on Wall Street, believes there are two major factors at work which will push gold higher.

The first is that the US department of agriculture's Crop Production Report in October revealed that acreage for staple food commodities such as corn is on the decrease.

In the face of increased demand from China, India and Latin America, Mr. Hutchinson claims that this will raise food prices and inflation - and therefore gold prices on the back of safe-haven buying.

The second reason for his optimism is the $700 billion rescue plan for US banks, which he explains was intended to encourage them to start lending again to revive the economy.

However, he notes that it has only served to finance takeovers of smaller institutions and that the money has to "come out somewhere" - namely through higher stock prices for banks.

In turn, this would improve confidence in the economy, thus forcing food prices higher and benefitting gold in the same way, Mr. Hutchinson writes in a Money Morning report.

He said: "Everybody thinks that because we're having a horrible recession, we're not going to have inflation. I think that's probably wrong.

"I think gold has quite good hidden-store value."

With this in mind, he concludes that as soon as the upturn commences, investors will "pile in", making the current lower prices a perfect opportunity for investing in gold.

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