Gold could fetch over 1,000 usd per ounce by 2010 - Credit Suisse |
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Published
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Tue, 30 Oct 2007 12:14
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LONDON (Thomson Financial) - Gold could fetch over 1,000 usd per ounce by 2010, said Credit Suisse, which upped its price forecasts, citing a cocktail of supportive factors for bullion looking ahead.The company now sees gold averaging 770 usd in the final quarter of this year, 694 usd in the whole of 2007, 838 usd in 2008, 950 usd in 2009 and 1,050 usd in 2010. Those are up from price estimates made last year of 680 usd, 665 usd, 700 usd, 741 usd and 800 usd per ounce, respectively.'In the current environment, upward pressure on the price of gold is likely being driven by the economic environment surrounding the US economy, in particular the strength of the US dollar, the oil and commodity prices and a change in the dynamics surrounding gold supply and demand,' said precious metals analyst at Credit Suisse, David Davis, who added he expects the same factors to continue supporting gold in the longer term.Gold moves in line with high oil prices, as investors use the metal as a hedge against inflation. Gold moves in the opposite direction to the dollar, as dollar-denominated bullion becomes cheaper for those trading in other currencies when the dollar slips, and vice versa.Oil is currently near a record high struck yesterday, and close to an unprecedented 100 usd per barrel milestone. Gold, meanwhile, is also close to a 28 year high, reached yesterday, of almost 800 usd.Many analysts say gold has re-established itself as a safe haven asset, against not only inflationary pressures but also recent economic turmoil, weak equity markets and geopolitical tensions.In the short term, the dollar and oil prices are likely to be the main drivers and all eyes are on a US interest rate decision tomorrow, which could nudge the US currency and in turn, gold.Some players reckon a quarter point cut in the Fed Funds rate is a likely scenario.'Although markets have positioned themselves for a 25 bps (basis points) cut, anything more would be bullish for metals, while anything less, bearish,' said Standard Bank analyst Walter De Wet.Gold is currently trading at 784.10 usd per ounce from 789.20 usd in late New York trade yesterday. Yesterday the metal hit 793.98, its highest level since January 1980, when it hit an all-time peak of 850 usd an ounce.anealla.safdar@thomson.comas/cmrCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Gold miners ETF rallies to all-time high on dollar weakness 