Thursday, 12th January 2006 (6057 views)

Demand in gold investment has caused Barclays Capital to increase its gold forecast by 13 per cent for 2006.

The rise in demand for gold has been attributed to the weakening US dollar and speculation that Asian banks are now looking to buy more gold.

This will have a knock-on effect on the demand for gold from mining prospects, as consumers get accustomed to higher prices.

A report for Barclays said: "A potential weakening of the yen could encourage buying from Japanese investors, who have been pivotal in pushing gold prices above $500 (£284)."

Consequently, the bank estimates gold for immediate delivery will now be $525 (£298) per ounce this year, up from $465 (£263) in 2005.

However, investment bank Macquarie is even more optimistic over gold prices this year, predicting a potential value of $600 (£341) an ounce.

It claims the value will peak in the second half of the year, following which it could dip slightly as 2007 approaches.

Investors are increasingly seeing gold as a viable investment opportunity, since it is currently outperforming stocks and bonds in terms of value of returns.

In the last five years gold has risen in worth by 90 per cent, reaching a 25-year high of £551.65 (£313.43) an ounce on January 9th 2006.

 

« Back to the stories

 

The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.