Gold News

Gold 'will hit $900'

A new bull run will see gold surge as high as of $900 per ounce in 2008, according to a new report from Virtual Metals (VM Group) and Fortis Bank.

The VM Group/Fortis bi-annual Yellow Book report on the gold outlook claimed that the new year would see bullion investment shoot up unstoppably – on the back of a weaker dollar.

Arguments in favour of gold's likely ascent focused strongly on the plight of the US economy, with a three per cent drop in US interest rates likely to drive the dollar's value down to fresh lows, making it more attractive to buy gold.

Jessica Cross, chief executive of VM Group, wrote in the Yellow Book report: "If the price does not rise to $900 per ounce some time in 2008 it will be a great surprise."

She added: "If the background macro-economic picture in the US and a weaker dollar prevails and gold fails to hit $900/oz, it will be a strong indicator that gold has reached a new historic ceiling."

The forecast also predicted that central banks within the European Gold Agreement (EGA) would not sell up to the 500 ton quota by the September 2008 deadline, with China's central bank tipped by VM Group not to add to its gold reserves.


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