Could gold prices actually double or triple from current levels?
*International Business Times, by Dorothy Kosich, June 30, 2008
“Citigroup forecasts that ‘gold is likely to regain $1,000/oz by end-08 and to work higher through 2009-2010.’
In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that ‘longer term, we believe that gold is capable of doubling or tripling from current levels.’
The Citi global metals forecasts have an upward bias, at $906/$950/1000 average in 2008/09/10.
The analysts said ‘secular and seasonal factors favor gold’ during the second half of this year. ‘We remain positive on gold, based on macro and supply/demand factors. The forces that have propelled gold for 5 years are firmly in place.’
During the second quarter of this year, gold has averaged $896/oz, up 34% from the same quarter of 2007 and down 3% from the first quarter of this year. ‘Following a series of downside fundamental tests gold appears to have found a floor, and quietly climbed back to $917/oz.’
‘Despite extensive hand-wringing, the ‘floor in the dollar’ has inflicted minimal damage,’ the analysts noted. ‘We believe the drivers of the gold bull market remain intact, heading into a favorable period.’
‘We see gold as well-positioned heading into Autumn, when fabrication tends to heighten the market,’ they added.
Nevertheless, Hill and Wark warned, ‘It will be important for seasonal/volatility dampened fabrication demand to recover, before gold can move higher.’ However, they added, ‘Longer term, we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary.’”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.