Although prices might first encounter a soft patch, gold could rally through the $2 000 per ounce level by year end, the latest Thomson Reuters GFMS gold survey reveals.
Releasing the report — Gold Survey 2011: Update 1 — at twin events in Hong Kong and London on Thursday, Thomson Reuters GFMS said this would mainly arise through further growth in investment.
“The critical statistic here is investment in all forms combined in the second half being forecast to reach a new record of just over 1 000 tonnes, which equates to a value figure of over $60-billion (basis a forecast period average price of $1 815). This compared to the Update’s figure for the first half of 624 tonnes (or $29-billion),” the report said.
Philip Klapwijk, global head of metals analytics at Thomson Reuters GFMS, said: “Some may think that our first half figure sounds a bit conservative but we should remember that early 2011 saw a wave of profit taking as the prior rally ran out of steam, and equities were still enjoying a nice bull run.”
The report then notes a sea change in investor behaviour, which was chiefly felt due to the intensification of the sovereign debt crisis.
“Not only did we have the threatened contagion from peripheral to core eurozone countries, but it also crossed the Atlantic in the form of the US credit rating being downgraded. And both of these were critical to the surge in investment witnessed recently, he noted. — I-Net Bridge