A leading analyst has suggested today (November 12th) that gold prices may rebound to above $800 per ounce in the next three months as the full scale of the economic downturn sets in.
Most commodities have taken a pounding in recent weeks, with $28 trillion erased from global liquidity markets this year and banks losing $920 billion by way of writedowns and credit losses, according to Bloomberg.
But now John Reade, from UBS AG, has explained that gold bullion is still popular and that investors will soon be returning in greater numbers to the yellow metal as they seek its safe-haven qualities.
He was quoted by the news provider as commenting in a report: "Interest in gold coins remains strong, with coin shortages apparent in many markets, while kilobars, one of the most popular investment categories, are trading at a high premium to the spot gold price due to long waiting lists at refineries."
Meanwhile, David Beahm, vice-president of precious metals retailer Blanchard & Co, has explained that gold will rise soon due to its "almost exclusively" inverse relationship with the dollar.
He claimed that although gold has suffered of late, "it is only a matter of time until it [dollar] begins to fall again".
"While gold has not performed as well as expected over the past month, it continues to be sought after as a good diversifier," said Mr. Beahm.
"The amount of money that has been injected into the economy, as well as the money that will be injected in the near future will cause the dollar to fall and gold to rise sharply."
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