rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Gold may hit $1,850 by Dec 2011

Gold may hit $1,850 by Dec 2011

Last updated on: October 22, 2010 13:09 IST

Gold may hit $1,850 by Dec 2011

     Next

Next
BS Reporter in Mumbai

Gold prices are likely to hit $1850 an ounce by the end of next year on strong demand from emerging economies and supply side constraints, Paul Horsnell, managing director of Barclays Capital said in a media briefing in Mumbai on Thursday.

Gold will first slide to $1,310-1,325 early next year on profit booking. But, the precious metal will get good buying support from central banks in Asia and West Asia regions, who are looking for opportunities to increase their gold portfolio.

Any aim to pick up gold in good volume will raise prices steadily to $1,450 by mid-next year and then the targeted $1,850 towards the end, Horsnell said.

Gold surged over 34 per cent since October 1, 2009 and 23 per cent so far this year.

Today, spot gold in London was at $1,337.17 an ounce at 1242 GMT, down from $1,343.50 the day before and down from a session high of $1,349.05 as the dollar clawed back gains against the euro.

Click NEXT to read further. . .



     Next

Gold may hit $1,850 by Dec 2011

Prev     Next
Prev

Next

Talking about India's central bank, the Reserve Bank of India, Paul said, "RBI picked up 200 tonnes of gold at the right time last year and is now scouting for opportunities to buy more. The current official gold holding at 557.7 tonnes is just 7.5 per cent of RBI's asset allocations with nearly nine per cent of growth in the GDP."

China being the world's largest gold producer holds 1,054 tonnes equivalent to a paltry 1.6 per cent of the central bank's total asset portfolios.

The country is understandably in the process of raising gold portfolio amicably looking at a double digit growth in the country's economy.

Click NEXT to read further. . .



Prev     Next

Gold may hit $1,850 by Dec 2011

Prev     More
Prev

More

Apart from that, Asian countries led by Taiwan, Singapore, Indonesia, Sri Lanka, Hong Kong, Mauritius are also eager to raise their gold portfolio.

Gold's appetite was also seen from the West Asian countries that currently have low exposure to gold relative to their overall economies.

Hence, the overall demand is likely to remain bullish in the future.

"Against that, scrap recovery in India which is a barometer to consumer confidence, has not happened the way we expected.

In turn, demand for fresh metal especially during festivals, rose sharply which is evident from the current enthusiasm among consumers," said Jonathan Spall, director.

Gold is still facing a genuine supply side constraint due to lack of new mine explorations.



Prev     More
Source: