Gold price and gold prices
Author: donnakay Total views: 57 Word Count: 363
Gold prices are a constant topic in the current economic situation. With the price of gold possibly reaching a quick ended fallback at $900/oz, the gold price is predicted to reach a new record high in the latter half of 2009 as the threat of inflation would instigate a new wave of investment, consultancy GFMS said on Wednesday at the launch of its13th Chinese-language version of its annual Gold Survey in Beijing.
At a function co-hosted by China National Gold Group Corporation and the World Gold Council, speakers from Shanghai Gold Exchange and Shanghai Futures Exchange also made introductory speeches on gold trading in China.
In his presentation, GFMS chairperson Philip Klapwijk said that an increase in overall supply was expected in 2009, owing to an expected further drop in net official-sector sales being offset by a modest increase in mine production, supported by a record high in the recycling of fabricated products.
Moving to demand side, fabrication demand, which was dominated by jewelry was forecast to fall considerably in 2009, due to high and volatile gold prices coupled with the slowdown in the global economy.
As a result, the market would move into substantial surplus this year and much of the gap was likely to be filled by investors.
GFMS believed that sustained concerns over the global economy and the well-being of the financial system would continue to fuel safe-haven interest in gold.
Moreover, investors would increasingly focus on a newer worry, namely the probable longer-run inflationary consequences of governments’ and central banks’ ultra-loose fiscal and monetary policies.
GFMS, however, warned that it might well not be a straight line rally as a summer lull or the need for inflationary pressures to build may end up in a period of sub-$900 prices in the short term.
“The price may have pulled back a fair bit from the February highs but that was largely just the market’s reaction to jewelry demand crumbling and scrap booming. We believe that it’s far from game over for investors. The gold prices in the coming months could easily re-attain the $1 000 mark and is likely to push up towards a fresh record high before the end of the year,” Klapwijk said.
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