A group of analysts at Full Circle Asset Management have predicted that Gold Prices will eventually move much higher if they can pass the $1,000 per ounce mark.
The psychological four-figure barrier has only ever been broken twice, once in March last year when prices hit a record $1,030 per ounce and once, albeit briefly, in February 2009.
Although Gold Prices have struggled to overcome resistance at that level, Full Circle explained that if they can push through a move to $2,000 per ounce would be feasible.
"Such failures, when overcome, generally lead to very big moves; historically, the longer the resistance resists, once exceeded the bigger is the move that takes place," they wrote in the Threesixty newsletter.
"In common with others, we have long thought that $2,000 per ounce was a reasonable expectation - although some say much higher."
The US government announced last week that it will sell 400 tonnes of its gold reserves to the International Monetary Fund, a move it has been negotiating for a lengthy period.
Responding to the news, UBS analyst John Reade aimed to play down fears that the transaction could have a negative effect on gold.
"There are lots of uncertainties regarding the sale but we do not expect this to be a negatively disruptive factor to the gold market," he told Reuters.
"If the gold is taken by other official sector buyers [it] could be a very positive development for the market."
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