Gold forecast to hit US$1,000

SINGAPORE - INVESTMENT bank Goldman Sachs has raised its forecast for the price of gold to US$1,000 (S$1,500) an ounce in the next three months from its previous forecast of $700 due to rising investor demand for safe haven assets.
Gold was trading at US$902.70 an ounce by 0106 GMT (9.06am Singapore time) on Thursday, down US$2.15 from New York's notional close, but was within sight of a near four-month high of US$930.40 an ounce hit last Friday. Gold struck record at US$1,030.80 last March.

'The gold price rally has been driven by surging demand for gold in all forms: physical gold, exchange-traded funds (ETFs), and futures contracts as investors seek 'a safe store of value' amid the financial distress and inflation risks,' Goldman Sachs said in a report.

'It is also important to emphasise that the recent strong demand for gold has not beenirrational but rather pretty much in line with the probabilities of financial and sovereign default.' It also noted a strong relationship between the price of gold in US dollars and the exchange rate of the dollar against other currencies has begun to break down, adding that strong investment buying would offset a decline in jewellery demand.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust , said it held arecord of 859.49 tonnes of gold as of Feb 4, up 6.12 tonnes from Feb 2.

'Such strong demandfor investment reasons is likely more than offsetting the declines in gold demand for jewellery use,' said Goldman Sachs.

'In fact, this recent surge in gold ETF demand would more than offset a 20 per cent decline in the fourth quarter global jewellery demand for gold,' it said.

The investment bank also raised its forecast for the price of gold to US$950 an ounce in the next six months from an initial estimate of US$785. Its 12-month gold forecast was pegged at US$825 an ounce, up from US$795 previously. -- REUTERS

Comments

Post a Comment

Popular posts from this blog

I'm an accountant, I hate my job, but seriously, I wouldn’t know what else to do

I was born to be a lot of things, but being an accountant isn't one of them. In my heart of hearts I have always known this, but for some stupid subconscious reason, I have always ignored it. Why? Well...um...err...I didn’t know what else to do. How many people faced with the same predicament of deciding on a profession upon graduating used “not really knowing what to do” as their guiding compass? Blink. Ten years have passed and you’re left wondering, how did I get here? In this cubicle? Doing something I cannot stand (and I’m not even honestly good at), with people I quite frankly don’t really care about? For me that was accounting, a profession that conjures numerous clichés, such as boring, bean counting, personality not needed, number crunching etc etc. These have now evolved and have been replaced by repetition, reconciliations, long hours, fudging figures, high turnover, Enron and even more reconciliations. R-E-S-P-E-C-T But please don’t get me wrong, I have the utmost respe...
Read more

Three money managers who lived through the 1987 stock-market crash warn of danger today

Image
By  Philip van Doorn Published: Oct 31, 2017 1:49 p.m. ET SHARE   ‘I would take some money off now because ... there are clear signs of deranged valuations,’ says Gabelli fund manager Lawrence Haverty Getty Images A trader on the New York Stock Exchange on Oct. 19, 1987 — Black Monday. When the stock market crashed on Oct. 19, 1987, investors panicked. It was an unfamiliar event — the previous decline of a similar magnitude occurred 58 years earlier, in 1929. Now, 30 years after Black Monday in 1987, there are professional investors still at work who lived through that fateful day. In interviews, three of them talked about their experiences, offered insights into warning signs and gave advice on how to handle major downturns. They are: •  Lewis Altfest , president of Altfest Personal Wealth Management, which manages about $1.3 billion for private clients. Altfest founded the firm in 1983 after working as a general partner and director of research at Lord, A...
Read more

Have We Reached a Top?

By James Kostohryz It's never been my position that the flow of fundamental news would turn from positive to negative overnight and in a total fashion. The world simply doesn't work that way. When I terminated my core long position a couple of weeks ago for reasons explained in�Ten Reasons the Countertrend Rally May Be Over,�I outlined a series of factors I believe may manifest in the later half of 2009 and the first half of 2010. Indeed, most of these factors will be more back-end loaded, as negative factors tend to build on one another and gain momentum in time through the medium of psychology and social mood. It's my view that the flow of economically relevant events�-- and perceptions of these events --are in the early stages of a transition. In this case, a transition means the flow of relatively good news will tend to wane somewhat while there's an uptick in relatively bad news. This is what one would expect at a top. However, it's to be expected that during t...
Read more