Gold News

Analysts See Gold Prices Rising

THE GOLD PRICE might rise beyond record highs to reach $2000, as sales of Gold Bullion skyrocket and central banks stock up, say a number of leading names in finance, according to the Guardian.

As a result of the uncertainty that has plagued the markets and investor fears of a double-dip recession, the Gold Price has soared to record levels, rising 9% this year to reach a peak of $1,264.90 (£834.44) an ounce, with influential names in the world of finance predicting it could top $2,000.

"I certainly expect the Gold Price to go much higher over the next few years," said Jim Rogers, the investment guru who called the start of the commodities rally in 1999. "Paper money is going to be debased and the price of real assets will be enhanced. I don't see the new commodity supplies coming that will end the bull market."

Charles Cooper at Oriel Securities said to London's Guardian newspaper that "... governments could be tempted to print more money to dig us out of a hole. That could precipitate inflation, making gold even more popular as a safe haven."
"This is an incredible time," said Kerry Tattersall, marketing director of Austrian Mint. "We have had people coming into the mint and asking for advice on how to convert all their savings to gold." Sales of Gold Coins and Gold Bars to the public rocketed in May to a record for a single month at 485,000 ounces. At the same time last year, the comparable figure was just 83,000 ounces.

The mint's most popular product is its 1 ounce gold coin, which currently retails for about €1,000 (£835). Also on offer are 1 kilo gold bars that sell for a mere €31,300. Silver is also growing in popularity, with Tattersall saying that sales have soared from 1m ounces in May 2009 to 1.85m now.

Suki Cooper, commodities analyst at Barclays Capital, says in the short term gold will be supported by demand for jewellery from the Far East; at the same time there is "a re-evaluation of how gold is perceived in the market". Cooper reckons the floor for gold in the long term is $850 an ounce against an average price of $310 in 2002.

The World Gold Council says shareholders are deepening their exposure to gold-mining companies and central banks are buying Gold Bullion on the open market. Marcus Grubb, WGC managing director, says: "The backdrop is the continuing financial crisis and people's desire to protect their wealth in uncertain times."

Christopher Whitehouse is working as a research assistant at BullionVault, the No.1 gold and silver ownership service for private investors.

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