When will gold return to its 1980 price?
"Gold may rise to a record next year as U.S. interest rate cuts weaken the dollar, according to Citigroup Inc., the world's biggest financial-services company.
Bullion has risen for five consecutive years, partly as the U.S. currency dropped, dimming the appeal of dollar-denominated assets such as stocks and bonds. Traders expect the U.S. Federal Reserve to cut borrowing costs in 2007 after raising them 17 times since May 2004.
The end of the Fed's cycle of rate increases ``may spark renewed bouts of dollar weakness,'' John H. Hill, a San Francisco-based analyst with Citigroup, wrote in a report dated yesterday. ``Higher interest rates are a headwind for gold.''
Gold may average $632 an ounce this year, $700 next year and $750 in 2008, Hill said. The metal may climb as high as $700 by year-end, and equal its all-time high of $850 through 2008, he added. Gold traded at $587.50 at 2:44 p.m. in London."
