The surge in the price of gold over recent months is set to continue, according to analysts at Goldman Sachs, who yesterday forecast that the gold spot price will reach $1,650-an-ounce in a year's time.
Analysts at the US investment bank said that the commodity would continue its momentous rise, which has seen the precious metal jump to all-time record levels. On 7 October it reached a record high of $1,364.77-a-troy ounce, and has continued to trade at strong levels. Gold reached $1,350 in trading yesterday.
Goldman Sachs argues that the tepid economic recovery in the United States, which has kept real interest rates at close to zero, and the possibility of an extension to Washington's quantitative easing programme will lead to continuing demand.
"With US real interest rates pushing lower off the slowdown in the pace of the US economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb," said David Greely.
As well as setting a 12 month target, Mr Greely, and his colleague Damien Courvalin, argue that the spot price will have moved though £1,400-an-ounce in the next quarter, and $1,525 in six months.
"Our US economic outlook suggests US real interest rates will stay lower for longer with renewed quantitative easing an effective catalyst to carry gold prices higher," Mr Greely said.
Others have also argued that the price of the yellow metal will continue to climb.
In August, Peter Hambro, the chairman of Russia-based mining group Petropavlovsk, predicted that gold would rise to $2,000-an- ounce.
"I said earlier this year that gold would hit $2,000 by Christmas, but it worries me; I'm scared of a much higher gold price – because it means my belief in the collapse of the world's financial system will be becoming more true," he told The Independent.
"In Indonesia they are using gold as a medium of exchange again – it's pointing in that direction again."
Last week, Mr Hambro revised his forecast, arguing instead that gold would reach $1,500 by Christmas, and adding that the price may even rise as high as $2,500-an-ounce "in a year or so".Reuse content