Gold - Overview from U.K . point of view
UK precious metals consultancy GFMS says investment demand for gold will outweigh a slump in fabrication demand and drive the gold price towards $1 000 per ounce this year.
GFMS chairperson Philip Klapwijk forecast gold to average $840 during the first half of 2008 with "$1 000 as a clear possibility for later this year."
The reason GFMS seems conservative on its predictions for the first six months lies in its view that a "short- to medium-term correction is possible, chiefly as a result of the speed of the recent price rise and the huge fund overhang on Comex."
GFMS reckons prices above $900 are "unlikely to be sustainable" because of the high level of speculative long positions and a "price-induced collapse in fabrication demand."
Gold may slide back
Should such a retreat take place GFMS estimates gold could slide back to the low $800 levels "partly as physical buyers are not expected to rush back in the face of such price volatility at elevated levels."
According to Klapwijk, the surge in investment demand this year will be driven by the same factors that fuelled the surge in the gold price over the last four months of 2007.
INFLATION FACTOR
"It's far easier to argue that we're at the start of a period of higher inflation and lower US growth, rather than we are emerging from the worst. All that is strongly pro gold moving forward. We can easily see higher gold prices without fireworks in the Middle East or Pakistan, though any political drama there or elsewhere is highly likely to rally the price yet further," he notes.
The AMP Gold Portfolio
Yamana $ 15.25 down .08 ( listed on Toronto as YRI, in the U.S. as AUY)
Western Goldfields (WGI ) 3.27 down .16
Centamin ( CEE) 1.25 down .02
Jack A. Bass is the editor of the market letter The Apprentice Millionaire Program - available at www.amprogram.com
Did you like this article?
Submitted By 
's
