Friday, 3rd February 2006 (5682 views)

The current high price of gold is not a bubble ready to burst, but instead is set to continue increasing, according to industry experts.

ANZ Investment Bank head of metals sales, Peter Hillyard, dismissed the idea that the price would suddenly plummet.

He said that commodities would benefit from the current bullish market, pointing to factors such as the need for diversification in portfolios.

"Like a gorilla with a gun, gold can go anywhere it wants," he said.

On Thursday the price of gold reached $573.30 per troy ounce, rising by 11 per cent already this year. Meanwhile platinum surged to a record high of $1,080 per ounce.

However, analysts believe that there is still room for further growth. The current price of gold is well below that the all-time high, set in January 1980. At that time a troy ounce was worth $850, which amounts to $2,100 after adjustment for inflation.

This week UBS Investment Bank raised its average gold price forecast for 2006 from $520 to $560, saying that the metal could trade at up to $675 in 2007.

Current political unrest and high oil prices could also be factors that keep the gold bubble afloat: historically, investors have tended to take refuge in precious metals in times of instability.

 

« 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.