Gold to hit US$1,000: Analysts

LONDON: The price of gold is hitting new record highs owing to the troubled US economy and a cocktail of other supportive factors, leading some analysts to predict US$1,000 (K2,937) per ounce could happen soon.
In recent days the precious metal has blasted past US$900 (K2643) in a record-breaking run.
Unprecedented demand for jewellery production in China and India, the weak US dollar, rising inflation due to high oil prices and fraught geopolitical concerns have sparked demand for precious metals – particularly gold.
On the London Bullion Market on Monday, gold blazed a trail as high as US$914.30 (K2,685) per ounce. Last Friday, gold had broken through US$900 for the first time during New York trade.
“Psychologically, US$1,000 per ounce now has to be a target,” John Payne, portfolio manager of Hexam Global Resources Absolute Return Fund, said.
“Gold looks very well supported.
“I think the primary driver is concern over the US economy and the weak dollar. Food price inflation, geopolitical concerns and oil near US$100 (K293.67) per barrel are all drivers of the price,” Payne added.
The weak US currency makes commodities priced in dollars – like gold and crude oil – cheaper for buyers using stronger currencies and therefore encourages demand.
Traders are also investing their cash in gold as they search for shelter from concerns over the troubled US economy. In addition, the metal benefits from its safe-haven status in times of geopolitical uncertainty.
Also, with oil prices trading above US$90 (K264.31) per barrel, more investors are turning to gold as they seek to guard against rising inflation -- sparked by the soaring cost of crude in many countries. - AFP