The outlook for gold remains strong and will continue to be a safe haven for investors, Resource Capital Research (RCR) senior gold analyst Tony Parry said.
RCR recently released the results of its major quarterly research report covering 15 global gold exploration and development companies.
Parry said that while the price of gold continues to show high volatility, it is unlikely to lose its reputation as a sound investment.
Even if it is considered ‘safe to go back into the water’ with equities, current stimulus spending, money printing and corporate rescues, and the resultant record budget deficits, particularly for the US economy, will produce the ‘X Factor’ that all gold bulls thrive on – fears of a re-emergence of strong inflation and a collapse in confidence in the US$. These factors should see gold back above US$1,000/oz later in 2009,” he said.
The spot price of gold is currently US$954.00/oz which is 8.5% higher than the price of US$879.45/oz at the start of 2009.
On 20 February 2009 the price surged towards the psychologically important US$1,000/oz mark (last breached in March 2008) but closed just below at US$992.90/oz.
The price of gold for Australian producers hit a record A$1,538/oz in March, up 52% from A$1,012/oz twelve months earlier.