THE price of gold could reach record highs of up to $1,500 (£949) an ounce in the next twelve months delegates at the London Bullion Market Association (LMBA) annual conference said yesterday.
The majority of delegates saw the price of gold rising to $1,406 an ounce by September next year but 32 per cent of delegates believed the price could rise beyond that.
The news came as spot gold hit a record $1,300 an ounce as an initially weaker dollar and speculation that the US Federal Reserve might further resort to quantitative easing to give the economy a leg up, supported sentiment.
The Fed said last week it was prepared to take action to help the recovery and lift inflation. Many analysts expect it to resume buying longer-term government debt later in the year to drive borrowing costs down further.
In the last 12 months, the gold price has risen by 30 per cent against a backdrop of volatile currencies, stocks and bonds and doubt over the resilience of the global economy.
With investors looking to protect against potential inflation, or deflation, analysts have also said that gold is a viable investment for both scenarios.
One of the major forces feeding investor demand has been the proliferation of exchange-traded funds backed by physical metal held in vaults. This has made investing in gold a reality for retail investors for the first time.
At the LBMA’s event in Edinburgh last year, at which the association conducted a formal price poll on the last day of the conference, delegates forecast a gold price of $1,18 by this September.
City A.M. Reporter