After briefly rising above US$1000 per ounce earlier this week, the price of gold is likely to stay high in the foreseeable future, DJ Carmichael resource analyst Paul Adams told MINING DAILY.
According to Adams, despite a potentially unstable market gold is likely to continue trading at the higher end of a range between US$850 and US$1050.
“It will probably spike on the upside and probably spike on the downside, but I do not see it trading a lot differently to that,” he said.
December gold traded as high as $US1009.70 on Tuesday this week, which is its strongest level since 20 February.
Much of the recent movement in the gold market has been attributed to the relative weakness of the US dollar, but Chinese interests have also affected prices, Adams said.
“The Chinese have indicated that diversifying away from US securities into gold could form part of their strategy going forward and that has been a bit of a catalyst in gold prices,” he said.
Regardless of the recent movement in the market, Adams believes that the fundamentals will stay within the stated range.
“We (DJ Carmichael) have held that view for about the past 18 months, and there is nothing that we have seen yet that has made us re-think that,” he said.