| Gold's Next Stop $ 1300/oz By Dec 2010 Gold closed a winning week with a bang Friday, notching a fresh record and helping silver settle at its best in three decades. Gold for December delivery (COMMODITIES:GCZ10) added $3.70 to $1,277.50 an ounce on the Comex division of the New York Mercantile Exchange. That supplants high marks reached Tuesday and Thursday. The contract hit an intraday high of $1,284.40 in electronic trading, but prices faltered after consumer-sentiment data clouded markets earlier in the day. The small dent Friday was mostly due to light profit-taking, analysts said."There's nothing to imply that the gold rally has been reversed," said Jim Steel, a metals analyst with HSBC in New York. Goldman Sachs said gold futures could reach $1,300 an ounce sooner than the investment bank expects if quantitative easing resumes. Quantitative easing, usually defined as a new round of monetary stimulus, "would likely accelerate the move to our 6-month price target and provide upside risk to our forecast," analysts at Goldman said in a note to clients Friday. Central banks' efforts to buy private assets and engage in other measures to inject more cash into their countries' economies have raised concerns that the U.S. dollar and other currencies will lose value over the next few years — putting a premium on so-called hard assets such as metals. "Gold remains the strongest beneficiary of uncertainty around the expansion of fiat-currency and competitive depreciation," said Australia-based analysts of Royal Bank of Scotland in a research note. The analysts at Deutsche Bank reiterated their case for gold. "We believe exchange rate and interest rate trends as well as central bank purchases, heightened macroeconomic volatility and de-hedging programs across the gold mining sector will sustain the rally," they said in a note. Central banks across the world are expected to buy about 15 metric tons of gold this year, GFMS Ltd. said in a white paper earlier this week. "If anything, we think that this figure carries some risk to the upside. This is a noteworthy reversal from consecutive years of net official-sector sales," and 2010 could be the first year central banks buy gold since 1988, William Tankard, a senior mining analyst at the London-based consultancy firm, said in an e-mail. Europe's last open-outcry trading Andrea Hotter takes a look at the last bastion of open-outcry trading in Europe, the London Metal Exchange. In another bullish factor for gold, top gold miner AngloGold Ashanti Ltd. earlier this week sold nearly $3 billion in shares and bonds to de-hedge -- buy itself out of contracts that tied the company to selling gold at guaranteed, but out-of-step, preset prices. On Friday, gold pared gains after a survey released by Reuters and the University of Michigan fell to 66.6 in September, the lowest since August 2009, and short of economists' expectations of 70.
Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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