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Gold at $900 in first half 2009
Allan Seccombe
Posted: Wed, 26 Nov 2008
[miningmx.com] -- THE gold price will remain closely tied to investment in the near future and it will trade in a range of $750 to $850/oz up to the end of the year, Australia's Resource Capital Research said in a quarterly report.
“The near-term outlook for the gold price remains closely tied to investment demand from safe-haven buying, which has underpinned the price in recent months and is looking increasingly strong,” RCR said.
The gold price could also receive a boost if the US dollar sheds its “current safe-have currency status” because of a decline in that country’s economy compared to other economies during 2009, it said.
“RCR expects gold to trade in the range of $750/oz to $850/oz in the next month or so, followed by a potential upturn to around $900/oz in 1H09 (first half 2009) assuming US economic conditions deteriorate relative to other major economies and the US dollar weakens.”
The gold price is currently is around $820/oz, having rocketed up some $80 since 18 November, gaining about half of that on 21 November alone because of dollar weakness and a firmer oil price.
“We believe that shrinking cash and bond yields and the recent rise in the gold price will underpin further investment interest in gold as a safe haven and store of value,” RCR
said.
Industry gold promoters, the World Gold Council, put out a third quarter report in which it said supply is curtailed from mines and central banks within the Central Bank Gold Agreement and demand is rising because of increased jewellery purchases and investment in physical gold and gold-backed exchange-traded funds.
“Given the uncertainty that surrounds the global economy, gold’s safe-haven appeal should continue, but so to will the possibility of heightened levels of activity in the speculative side of the gold market,” the WGC said.
Strong demand seen in the third quarter, which drove identifiable demand up 170 tonnes to 1,133 tonnes compared to the same period a year ago, is likely to continue for jewellery, bars, coins and ETFs into the final quarter of 2008.
The WGC did not give a price forecast.
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