Gold Prices to reach $3,000/oz 'in a few years'

A renowned gold commentator has suggested that the yellow metal could climb as high as $3,000 per ounce in the next few years as the effects of the financial crisis unfold.

Jeffrey Nichols, head of American Precious Metals Advisors, conceded during a speech at the Gold Outlook Asia conference last week that such sizeable gains will not happen in the near future.

However, he noted that the current Gold Price bull run - which commenced in 2001 - could eventually result in a push to almost treble its present levels, which stand at roughly $1,040 per ounce.

"Thanks to the extremely expansionary monetary policy - and with a little help from ETF investors, central banks, and new or evolving geographic markets - like China and India - gold will most likely climb into the $2,000 to $3,000 range," he said.

"And it could go even higher given the right confluence of economic and political developments … or if a late-cycle mania produces a final hyperbolic bubble before the Gold Price cycle moves into its next bear-market phase."

Mr. Nichols' comments last week were made against the backdrop of the latest Gold Investment Trends report from marketing organization the World Gold Council.

The study revealed that demand for investing in the metal increased during the third quarter of 2009 and Natalie Dempster, head of North American investment at the body, expects this trend to continue.

"A recovering global economy coupled with most major central banks keeping benchmark rates at record low levels increased demand for gold as a store of value, as some investors feared about future inflation," she said.

"Moreover, we saw an improvement in risk appetite during the quarter, which also put more downward pressure on the dollar as investors sold US Treasuries in favor of higher-yielding assets overseas, further increasing demand for gold as a dollar hedge."

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