Gold to hit record 1,300 dollars in 2010: GFMS consultancy

14th September 2010, Comments 0 comments

The price of gold is set to reach a record high above 1,300 dollars an ounce this year as investors seek a safe haven amid an uncertain economic outlook, metals consultancy GFMS predicted on Tuesday.

"I think we could easily see gold spike comfortably above 1,300 dollars before the year's out," GFMS chairman Philip Klapwijk said in the independent group's latest annual survey of the precious metal.

The forecast came as gold struck a record high above 1,269 dollars an ounce on Tuesday.

"We'll probably get a fair bit of profit taking as we head into the New Year but I wouldn't take that as a sign that the party's over -- further gains in 2011 are far from out of the question."

London-based GFMS said demand from investors had been "the prime driver of the gold price's rally during the first half of the year ..."

"Gold certainly lived up to its reputation as a safe haven in troubled times," said Klapwijk.

"Just look at the explosion in investor interest that followed the sovereign debt crisis unfurling in Europe," he added.

GFMS also said in its report: "Other factors cited in explaining investor interest included a shaky outlook for the industrialised world's economies, the maintenance of low interest rates and the still feared threat of future inflation.

"One traditional driver of gold strength, US dollar weakness, proved conspicuously contrary as that currency also benefited from a flight to quality and so frequently strengthened in tandem with gold," it added.

© 2010 AFP

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