Gold increased in price again over the weekend, currently sitting at USD$745 per ounce. This is up just over 1.5% and is a 28 year high. The prime factor behind this upward movement is currently the weakening US Dollar, which after staging a short recovery against major currencies like the Euro, continued to drop to record lows at the end of the weak.
The other factors - oil prices ,the financial risk flight, the middle east, all continue to back up the current scenario of strong movements upwards in the price.
Overseas analysts are currently estimating between $750 and $850 per ounce by the end of 2008, but depending upon who you read or listen to that can move any where up to $1200 per ounce.
Locally the big impact is once again our climbing dollar, with the carry trades appearing to be resuming, and stronger than anticipated economic reports (GDP up 2.2% for the year) which could lead to higher interest rates towards the latter part of the year. This means that the price of gold in NZ Dollars, is once again getting cheaper (albeit slightly at the moment) even though the gold price internationally is sky rocketing.
Press Release - Swiss National Bank Gold Sales
Between 15 June and 26 September 2007, the Swiss National Bank sold a total of 113
tonnes of gold. The gold sales fall within the bounds set by the second gold agreement of 8 March 2004, in which the central banks of the Eurosystem, plus the Sveriges Riksbank and the Swiss National Bank, agreed to limit their gold sales over a period of five years,beginning on 27 September 2004. The third year of this agreement ended on 26 September.
On 14 June 2007, the SNB announced that it would be adjusting the composition of its
currency reserves and would, to this end, sell a total of 250 tonnes of gold by the end of September 2009.
This gives a great indication of the market is accommodating large volumes of gold sales, and what can be expected from the central banks going forward.
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