Tags: Goldman Predicts Gold May Rally to Record 1 | 300

Goldman Predicts Gold May Rally to Record $1,300

Thursday, 12 Aug 2010 09:31 AM

Gold may surge to a record $1,300 in six months, pushed by low interest rates and investors flocking to safety, Goldman Sachs Group Inc. says.

“The recent selloff has left speculative long positions in gold oversold relative to U.S. real interest rates,” Bloomberg quoted analysts as predicting. This has “set the stage for a rally to our six- month gold-price target of $1,300 an ounce,” the analysts wrote in a recent note.

Spot gold prices extended gains Thursday after U.S. weekly unemployment data reinforced concern among investors over the outlook for the world's largest economy, prompting a fresh wave of safe-haven buying.

Gold rose Wednesday as more worrisome economic news followed the Federal Reserve's downgrade of its outlook for the recovery.

Thursday in early New York trading, gold was at $1,213.50 an ounce, up from $1,197.00 an ounce late Wednesday. Gold for December delivery on Comex was last up $17.20 at $1,217.0 an ounce.

Investors regard the U.S. and Japanese currencies and gold as safer assets and tend to buy them when reports suggest the economy is weakening.

“Concerns over a slowdown in the global economic recovery are still haunting the broader market with macro releases still fairly downbeat,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. More “carnage on the broader market” would give “a small boost to bullion from here,” he was quoted by Bloomberg as saying.

Gold futures have climbed 10 percent this year and are set for a 10th straight annual advance, the longest winning streak since at least 1920, as investors shield their wealth against economic turmoil and the prospect of currency debasement. The metal reached a record $1,266.50 an ounce on June 21.

“The global economy is not as bright as anticipated earlier,” said Hwang Il Doo, a Seoul-based trader with KEB Futures Co. “Investors are snapping up safer assets such as gold at the expense of equities and commodities.”

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Gold may surge to a record $1,300 in six months, pushed by low interest rates and investors flocking to safety, Goldman Sachs Group Inc. says. The recent selloff has left speculative long positions in gold oversold relative to U.S. real interest rates, Bloomberg quoted...
Goldman Predicts Gold May Rally to Record 1,300
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