Analysts predicted that gold prices is expected to raise further at least for the next one year before the gains are capped, given the economic uncertainties in advanced nations and the volatility of the US dollar.
Spot gold broke past US$1,400 an ounce on Friday for the first time since Nov 9 after data showed US jobless rate unexpectedly hit a seven-month high. Gold price raise 29% year-to-date
Why gold prices keep rising?
- Gold is the beneficiary of all that instability in the markets right now.
- Volatility of US dollar due disappointing job and economic data in the United States.
- Economic uncertainties in the Eurozone.
- High demands for gold by investment funds and retail investors.
- The most importantly the current paper of fiat money not backed up by real assets.
How much further it will raise?
- Goldman Sachs, predicted the price to rise to US$1,690 an ounce over the next one year but the gains would peak at US$1,750 an ounce in 2012 on expectations of strong US economic growth and hence a stronger US dollar.
- Bank of America Merrill Lynch expected the price to reach US$1,500 an ounce next year.
Interested to invest in gold? Read on How to Invest in Gold?
However, remember that Goldman Sachs view that at current price levels gold remains a compelling trade, but not a long-term investment