Financial Daily from THE HINDU group of publications
Saturday, Sep 17, 2005
Financial Daily from THE HINDU group of publications Saturday, Sep 17, 2005 |
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Agri-Biz & Commodities
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Precious Metals Bull run may drive gold prices higher Our Bureau
Mumbai , Sept. 16 A BULL run in the international gold market is expected to take prices even higher than $460 an ounce. At forenoon on Friday in the London market, gold was trading at $459.65/oz, up $3.40/oz, buoyed by positive reports from Asia. On TOCOM, the precious metal extended its gains with heavy buying from the Japan general public prompted by overnight gains in New York. While the gains on Thursday came despite a weaker euro, gold received a boost today because of a euro recovery back to recent levels, experts pointed out. The yellow metal easily surpassed the 17-year peak of $456.75/oz last December. Investors have been encouraged by support from strong physical demand aided by reports of robust physical demand, while high oil crude prices are also seen fuelling speculative buying of gold as hedge against inflation. Notably, inflation expectations have been on the rising trend, currently above 2.5 per cent, said an analyst from Barclays Capital. "In the current atmosphere, firm oil prices will undoubtedly provide an excuse for investors to drive gold up, while further encouraging signals are coming from gold equities," the analyst pointed out, adding that for now, the market appears to have largely put aside nagging concerns like the large speculative positions and an increasing likelihood of a Fed rate hike next week. Risks are still skewed to the upside in the near term with a third quarter target of $470/oz, the expert pointed out.
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