Summer Marks "Good Time" to Buy Gold

WITH PRICES set to rise from the current $1250 to $1600 and then $2300 an ounce – if not $6000 – according to a 70-page report from Austria's Erste Group, the bank notes that "traditionally, June tends to be a good time to buy gold.

"Upward momentum is strongest in the second half of the year," it says. "September is usually the strongest month, which is due to the wedding season and the Diwali Festival in India. On top of that, Ramadan, jewellery purchases in the run-up to Christmas, the Chinese National Day, and the Chinese New Year festival play an important role in the seasonality.

"Given that the seasonality is no secret anymore, it reinforces the performance as a self-fulfilling prophecy."

Erste's forecast comes amid a flurry of new Gold Price targets, issued in the last few weeks. Barry Dawes of Australia's Martin Place brokerage told a conference this month that US prices could hit $5000 an ounce. US fund manager Peter Schiff told BusinessWeek "Gold could reach $5000 to $10,000 per ounce in the next 5 to 10 years."

Noting what it calls "Gold's shining performance" of the last 9 years, and recommending that investors buy gold this summer, the Erste report says that if the 24-fold gains of the 1970s were repeated, investors buying gold for Dollars could see the price reach $6000.

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