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Gold is up at US$985 at the moment and looks set to head for even greater highs.
There has been a sense with analysts that this run on gold would end and the price would settle back down around the $850 mark.
However more and more analysts are now saying that gold looks well supported at current prices and should crack that magic US$1,000 in the near future.
In an article on the Financial Times website John Reade precious metals analyst at UBS says, “We have argued regularly that fundamental support for gold lies between $700 and $750, yet gold stubbornly refuses to correct despite occasional periods of dollar strength, crude softness and the waxing and waning of risk appetite.”
The article reinforces what we have been seeing here at the NZ Mint for a while; people are turning to gold as a safe haven investment in turbulent economic times. Global inflation remains high, supported by high oil, metal and agricultural prices – and as gold is an inflation-proof store of value, savvy investors are putting a part of their portfolio in the precious metal.
Last year gold’s value increased 31 percent and this year it has already risen 15 percent. Reade predicts gold to reach $1,025 an ounce in one month’s time and $1,075 in three months. Given current demand, those levels look increasingly likely.
Fun gold fact of the day: the biggest gold nugget ever found was in Victoria Australia and was called the ‘Welcome Stranger'.
It weighed 2316 troy ounces or 72.04 kg. After smelting, 2268 ounces were obtained from the nugget. At today’s prices that would fetch a cool $2.2million. Crikey.
