GFMS predicts gold prices will go beyond last year’s - News.MN

GFMS predicts gold prices will go beyond last year’s

Old News! Published on: 2010.03.01

GFMS predicts gold prices will go beyond last year’s

News.MN
News.MN
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The price of gold this year will likely rise above 2009″s record of USD1,226/oz  and could even climb as high as USD1,300/oz if the global economic recovery proves sufficiently sluggish and new investment money continues to enter the market, according to Philip Klapwijk, chairperson of consultancy GFMS. However, he has cautioned that the big role being played by investment demand leaves the gold market vulnerable to a major correction if and when investors start looking elsewhere.



Investors have been buying gold as a safe haven investment, as a hedge against inflation and in the expectation that the metal”s price will continue to rise. While investment inflows into gold remain significant, and look likely to continue that way, the market reliance on investment is “somewhat worrying” in the longer term. Because of the market”s dependence on investment, the biggest threat to the gold price will obviously be the eventual shift to “business as usual” in the world”s economies, Klapwijk said. “The honeymoon won”t last forever. At some point, the scenario does change, and then the investment case for gold becomes less appealing.”

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