| |
| |
 |
| |
|
| |
|
| |
|
SINGAPORE : Analysts said gold prices are likely to head higher towards the end of the year, as investors turn to safe haven assets.
They said this will be driven by economic uncertainty in the US and Europe, and the weakness of major reserve currencies.
Gold had a sparkling second quarter. Prices of the yellow metal rose about 12 per cent on-quarter, fuelled by mixed economic news from the US, concerns over the Eurozone's debt position, and weak reserve currencies.
Spot gold rallied to US$1,265 an ounce in June but fell subsequently to US$1,160 on Tuesday this week.
Sentiment was partly affected by positive corporate earnings in the US, which drove interest for stocks.
A lack of inflationary pressures also reduced gold's appeal as an inflation hedge.
"So far inflation has not been a big factor, there still is sufficient capacity in the global economy that hasn't put much pressure on inflation generally," said David Cohen, director of Asian Economic Forecasting, Action Economics.
Analysts however don't believe that gold prices are on a down-trend.
This is due to increasing buying from China and the wedding season in coming months in India, which will boost demand for gold jewelry.
But analysts said towards the end of the year, gold prices may rise to the US$1,300 an ounce level.
Ong Yi Ling, an investment analyst at Phillip Futures said: "I think gold will still continue to increase in the later part of this year because of the economic uncertainty in the US. Until we see a material recovery in the US economy, what we will see is that people will continue to look to gold as a form of portfolio insurance and portfolio diversification.
"So with that in mind, I think we will still see some form of upside for gold prices."
Analysts said the current support level for spot gold prices lies at US$1,150 an ounce versus its current traded price of US$1,165. - CNA /ls
|
