THE price of gold is expected to extend its decade-long bull run and hit as high as US$2,500 per ounce by the end of this year amid a worsening sovereign debt crisis in Europe and United States struggles with a massive deficit, analysts said.
JPMorgan raised its expected price of the safe haven metal to at least US$2,500 per ounce by the end of December on expectations the global economy will hit another crisis, the investment bank said in its latest report.
JPMorgan previously put its estimate at US$1,800 an ounce, a level breached earlier this week. Goldman Sachs projected the price at US$1,860 in the next 12 months while analysts with UBS also raised their forecast to US$1,850 in the next three months.
Gold rocketed above US$1,801 per ounce for the first time on Wednesday in New York as stock markets tumbled around the world. It fell US$32.80 per ounce to US$1,751.50 on Thursday. The Wednesday record almost tripled its 2008 lows of US$680.
“The price is likely to swing between US$1,750 and US$1,850 per ounce in the short term,” said Zhang Nan, chief analyst with Goldfield Asia Co in Shenzhen.
“Our projection is that it may climb up to US$2,000 this year.”
A possible third round of quantitative easing in the US and the situation in Europe will determine how soon gold hits that target, Zhang said.
Jason Toussaint, managing director of World Gold Trust Service LLC, said yesterday in Shanghai that increased demand is the key reason driving gold’s sterling run.
Source: Shanghai Daily