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The base case for gold topping $700/oz by year end is sound - Paul Walker, GFMS MD In an interview on Radio 2000 @ 18:20 on 11 August 2006 [miningmx.com] -- THE base case for a stronger gold price is intact and bullion will break through the $700/oz level before the year is out, GFMS managing director Paul Walker said. There was a degree of uncertainty in the market after the US Fed left interest rates unchanged and investors pondered the inflation outlook, he said on the Moneyweb Power Hour week-nightly radio show. "I think that’s really reflected in the fact that gold really moved either side of recent highs, and is looking for new direction. The base case, though, still remains, in our view, a very solid one from an investor’s perspective," Walker said. "I think we will see that coming through over the next couple of months. But at the moment that indifference, if you like, in the market has been reflected not just in gold, but in stocks and other asset classes," he added. The movement of the dollar against other currencies is the key to gold's direction. If it goes significantly weaker and experiences sustained pressure, the gold price is likely to rise, he said. "I guess I’ve been saying it for long enough now that, sooner or later, who knows, I may be right, but there is a firm conviction from the economic analysis of the reality that’s out there that gold still has a lot of upside potential on the back of a realignment of portfolios globally when the dollar does finally start to weaken significantly," he said. "But that hasn’t happened to the extent that I would have anticipated maybe six months ago," he said. A trickle of positive economic data from the US economy was little more than a temporary blip, he added. Asked if the gold price would breach the $700 level by the end of 2006, Walker said: "I’m convinced of that... I’m still very, very confident that we will see the spot price pushing towards $700, if not beyond that, by the end of the year."
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