Gold could hit $1,500 by year end

GOLD prices could reach a record $1,500 an ounce by the end of the year, analysts predict.

“With the break of the previous all-time high at $1,265 last week the next target looks set to be the $1,300 level, and given the fact that demand is set to remain pretty robust a move towards $1,500 by the end of the year is by no means out of the question,” said Michael Hewson, of CMC Markets.

“Much will depend on how the market perceives the actions of the Federal Reserve... but any indications that further stimulus is on the cards will continue to buoy the gold price.”

With investors worried about currency devaluations in the face of a double dip, gold has been popular. But after hitting record highs for three days, the price dipped yesterday as a report showing signs of stability in the US housing market prompted bullion investors to take profits.

Traders said the gold market was nervous about the Federal Reserve’s policy meeting. Broker Tom Pawlicki, of MF Global, said gold could fall if the Fed “stayed away from commenting on new measures to spur the economy”.